Secondary Market for Pre-IPO Equity Under SEC Scrutiny (GS)
Trading shares in privately-held companies will result in Security and Exchange Commission (SEC) sanctions against two firms according to Bloomberg News citing unnamed sources. The two firms, Felix Investments Inc. and SharesPost Inc., both engage in trading shares in companies…
Trading shares in privately-held companies will result in Security and Exchange Commission (SEC) sanctions against two firms according to Bloomberg News citing unnamed sources.
The two firms, Felix Investments Inc. and SharesPost Inc., both engage in trading shares in companies that are not yet listed on regulated exchanges. Felix Investments creates pools in which investors can then purchase shares, and SharesPost acts as a broker between private sellers and private buyers of non-publicly traded shares.
On sharespost.com, for example, shares of Facebook are trading at $38/share, even though the stock has yet to conduct its IPO. Goldman Sachs Group Inc. (NYSE: GS) once considered selling $1.5 billion in Facebook shares to “accredited investors” before dropping the idea.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
