Perhaps not surprisingly, the SEC is reportedly looking into the recent Goldman Sachs Facebook investment.

The Wall Street Journal, citing “people familiar with the situation,” reports that the SEC is in the early stages of an inquiry over rules concerning the dividing line between public and private companies.

Goldman Sachs created a “special purpose vehicle” that allows potentially hundreds of its clients to invest in Facebook, yet Facebook’s financial books would only show that class of investors as a single entity. In doing so, Facebook would avoid/delay the 500-shareholder dividing line in which companies with that many investors are required to disclose financial information even if they’re not public.

According to the WSJ, if the SEC signs off on the Goldman Sachs investment setup, it could open the door for other companies to make similar arrangements in an effort to delay going public.

It was the SEC’s 500-shareholder rule that prompted Google to finally go public in 2004.

Related Topics: Facebook

About The Author: Matt McGee is Search Engine Land's Executive News Editor, responsible for overseeing our daily news coverage. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He blogs at Small Business Search Marketing and can be found on Twitter at @MattMcGee and/or on Google Plus. See more articles by Matt McGee

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