Facebook Fired Employee for Insider Trading Ahead of Goldman Deal
Facebook fired a corporate development manager for buying Facebook shares in a private market transaction prior to the announcement of Goldman Sachs' investment in the company, according to the website TechCrunch.
The share purchase allegedly violated Facebook's insider-trading rules.
TechCrunch's sources disagree about the connection to the Goldman investment. Some say the purchase was made with knowledge that the deal was coming. Others say it was made prior to any negotiations with Goldman .
Shares of non-public Silicon Valley companies like Facebook and Twitter have been trading on so-called private, or secondary, markets. Such trades have recently come under scrutiny from some who fear they lack regulatory supervision.
Goldman's investment in Facebook reportedly valued the company at $50 billion. Obviously, knowing about the investment or the valuation ahead of time would have created an incentive to buy shares, in hopes that their value would increase once the deal was made public.
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