By Tom Bradley

It was reported this week that Goldman Sachs is investing $500 million in Facebook, which is a private company. Goldman’s 470 partners and select clients are also being given an opportunity to buy shares.

One report suggested that this investment puts Goldman in a good position to be lead underwriter on the IPO when Facebook issues shares to the public in the coming year or two.

Now call me old school (please), but doesn’t this eliminate Goldman from leading the IPO? As a shareholder, they clearly have a conflict of interest. A serious conflict of interest.

Now I appreciate the steps regulators are taking to clean up our industry, and I know they have lots on their plate, but they clearly need to spend more time on the trading desks and banking divisions of the investment dealers. What was unthinkable when I got into the business in the early 80’s, is now common practice. I don’t get it. Investment banking is the wild west while mutual fund distribution is the army.

I’ll stop here before I get too worked up. I need to go and get approval from Elaine, our Compliance Officer, to make sure this posting doesn’t represent improper marketing literature. The regulators are watching.