SEC clears Blackstone IPO despite lawmakers' plea

By Rachelle Younglai

WASHINGTON (Reuters) - A last-minute plea from a senior U.S. House of Representatives Democrat to delay Blackstone Group LP's initial public offering was rejected by U.S. regulators on Thursday, and the IPO went ahead, eagerly grabbed up by hungry investors.

In making its decision, the U.S. Securities and Exchange Commission said it "rigorously applied" U.S. laws in reviewing the offering.

Rep. Henry Waxman, a California Democrat who heads the House Committee on Oversight and Government Reform, had urged the SEC to delay the private equity fund's IPO until Congress had a chance to hold hearings on it.

But soon after floor trading ended at the New York Stock Exchange Thursday, the IPO was priced at $31 per share, at the top of its projected range, and raised $4.13 billion.

Several fund managers said the deal was heavily oversubscribed after Blackstone mounted lavish and extremely well attended marketing presentations. The bulk of the interest was from hedge funds, investors said.

The SEC, which had remained largely silent amid growing political pressure about Blackstone, issued a brief statement saying, "Congress has created the world's strongest investor protection laws, which the commission has rigorously applied."

Under securities law, the SEC can only deny an issuer's IPO registration statement because of a material misstatement or an omission of fact.

In a letter to SEC Chairman Christopher Cox, Waxman said Blackstone's IPO may present potential investors and the public with new and undisclosed risks, while stripping them of necessary protections.