I think that they are circumventing SEC regs on 500 of shareholders for privately held companies. GS could sell the stake to HNW but for the SEC it would appear

I think that they are circumventing SEC regs on 500 of shareholders for privately held companies. GS could sell the stake to HNW but for the SEC it would appear that only GS is a shareholder. So basically they get away with all the reporting requirement, Sarbanes-Oxley and what have you to tap public markets by going through GS. Meanwhile GS passes off all the risk to HNW individuals and keeps some nice change for itself. Frankly as a libertarian I do not see any problem with this. As long as GS does not come back looking for a bailout.