Goldman Takes 'Private' Equity To a New Level

GOLDMAN TAKES 'PRIVATE' EQUITY TO A NEW LEVEL
[SOURCE: Wall Street Journal, AUTHOR: Randall Smith randall.smith@wsj.com]
Goldman Sachs Group is creating its own private system to trade the stocks of companies that don't want the scrutiny and regulatory burdens of going public. Nasdaq is also planning its own new market for smaller, unregistered securities. These markets will generally be closed to individual investors. For instance, Goldman's market is open only to large institutional investors with assets of more than $100 million. That is because the stocks traded on it aren't registered with the Securities and Exchange Commission and issuers aren't subject to SEC regulations designed to protect individual investors. It represents the latest step in the creeping exclusion of individual investors from a growing proportion of financial-market activity. For instance, giant private-equity firms are busy buying public companies and delisting them from stock exchanges. The growing importance of hedge funds -- which are generally limited to wealthy investors, institutions and endowments -- also excludes individuals.
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