vruz:

by Christine Harper, Bloomberg News

Just as Goldman Sachs Group Inc. prepares to unveil business standards aimed at improving its reputation after settling fraud charges last year, the Facebook Inc. stock sale to clients shines new light on the firm’s potential conflicts of interest.

In pitching as much as $1.5 billion in stock in the closely held social-networking company to wealthy investors, Goldman Sachs disclosed that it might sell or hedge its own $375 million investment without warning clients. The company’s disclosures didn’t reveal that one of its star fund managers, Richard A. Friedman, rejected the deal as inappropriate for his clients.

Chief Executive Officer Lloyd C. Blankfein, 56, created a business standards committee last May after the U.S. Securities and Exchange Commission sued Goldman Sachs for fraud. The SEC alleged that the firm misled investors in a 2007 mortgage-linked investment by failing to inform them of a hedge fund’s plan to bet against the investment. The committee’s report, which could be released as soon as next week, will address how the company can “reinforce the firm’s client focus and improve upon the transparency of our activities,” according to a May statement.

vruz: how does it feel to be a US taxpayer funding Facebook through the Goldman holding?

@Vruz we’re not funding Goldman directly anymore - they repaid their bailout loan last year.  We’re funding Goldman indirectly through too to fail policies.  At the same time, why their customers would ever want to do business with a company that has so knowingly traded against those customers’ interests is beyond me.