Goldman Sachs Group Inc. slammed the door on U.S. clients hoping to invest in a private offering of shares in Facebook Inc., because it said the intense media spotlight left the deal in danger of violating U.S. securities laws.

Goldman's decision to allow only non-U.S. investors to buy shares in the social-networking site is a black eye for the Wall Street firm, which sent jealous rivals scurrying for look-alike deals when the Facebook agreement surfaced two weeks ago.

The...