
SEC Probes Trading in Private Companies Including Facebook and Twitter - 10smom
http://mashable.com/2010/12/29/sec-probes-trading-facebook-twitter/
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known
From my experience I learned that there only 2 ways we can _consistently_ make
profits in stock markets.

    
    
        1. Front running
        2. Insider trading

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yummyfajitas
1 is just a particular variety of 2.

(By the way, you've just restated the efficient markets hypothesis.)

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nitrogen
Can anyone point to examples of harm done by mostly-unregulated private
trading of private companies?

As an aside I found it amusing that all that's required to turn the year in
the SEC logo from 1934 into 1984 is adding an L in the middle.

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andylei
before the SEC changed its disclosure rules, firms could release earnings to a
select group of investors before it released them to the open market. if you
were in this select group, you were basically guaranteed trading profits.

theoretically, facebook or twitter could do the same.

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ebaysucks
Hopefully the SEC won't regulate secondmarket.com to death.

I'm curious what made them pursue this - if there are no complaints, this move
is just to keep themselves relevant or to protect the Wall Street buddies.

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bretpiatt
This isn't anything new caused by SecondMarket and Facebook wouldn't be the
only company that isn't traded on a major public exchange that has to publish
information, example SunGard:
[http://www.sungard.com/aboutsungard/financialinformation.asp...](http://www.sungard.com/aboutsungard/financialinformation.aspx)

Having to file with the SEC doesn't force Facebook to go the route of a
traditional IPO, they can continue to sell shares on limited access
marketplaces such as SecondMarket -- they will just need to start publishing
audited financials.

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ROFISH
Wouldn't SOX also come into play?

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sabat
No, because SOX (the law) only covers publicly traded companies.

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sabat
Why would the SEC have any jurisdiction over private companies??

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cosgroveb
They have jurisdiction over trading of securities, which shares of private
companies are... The Securities Exchange Act regulates the general-public
trade in securities and amendments have extended the SECs mandate to include
OTC trades as well as regulate companies that aren't listed on exchanges.

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sabat
I didn't realize that -- seems like government overreach to me (a political
moderate).

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cosgroveb
Perhaps, but keep in mind that a lot of these regulations were enacted during
times of economic crisis (the original Act was passed during the Great
Depression).

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endlessvoid94
Interesting. It seems to me that they should only then be utilized in similar
economic climates.

