Goldman Sachs bars US clients from Facebook offering

But there is $7bn in orders from foreign investors

Goldman Sachs has declared that it will not allow its US clients to invest in a private offering of shares in Facebook, according to the Wall Street Journal.

In a statement, the New York-based global investment banking and securities firm said that "the level of media attention [on the offering] might prevent the proper completion of a US private placement under US law".

Under US Securities and Exchange Commission (SEC) rules, private placements "cannot be the subject of advertising, general promotional seminars or public meetings in connection with the offering".

However, rules in other countries are less stringent, meaning Goldman's non-US clients will be free to invest as long as they qualify as "professional investors".

According to experts, the move could damage the investment firm's links with some of its best clients if they are left unable to purchase shares.

Facebook executives are also said to be frustrated, but with $7bn (£4.4bn) in orders from foreign investors it is unlikely the change will have much impact on the amount the firm receives from the private offering. This $7bn equates to more than $4 (£2.50) for every $1 in shares being sold.

The past few months have seen growing interest in web 2.0 companies from investors. Further to the Facebook deal, Goldman Sachs has also been consulting with discount web site Groupon over an IPO.

In addition, both Skype and corporate networking site LinkedIn are reported to be raising investment and moving towards IPOs this year.