SEC probes trading in privately-held Internet firms -reports

Dec 29 (BestGrowthStock) – The U.S. securities regulator is looking
into share trading in privately-held Internet companies
including Facebook and Twitter, media reports said, citing
people familiar with the inquiry.

The Securities and Exchange Commission has sent letters to
several people trading in the stock of these companies, seeking
information about topics that include how such funds are valuing
shares of those firms, the Wall Street Journal reported.

An SEC spokesman declined comment to the WSJ.

An emerging crop of online trading platforms like SharesPost
and SecondMarket facilitate share trading of leading unlisted
Internet firms.

The probe is in a preliminary stage and appears to be partly
focusing on funds that have been set up to allow investors to
trade in private companies, the WSJ reported.

The regulator may also probe how the existence of funds
affects an SEC rule that states that private companies must have
fewer than 500 shareholders, or else publicly disclose
significant financial information. This was part of the reason
Google Inc (Read more about Google Stock Analysis) (GOOG.O: ) went public in 2003, the Financial Times
said.

In recent months the implied value of Facebook has risen
more than 50 per cent, while the value of Twitter has more than
doubled, the FT reported.

Early employees and investors in private companies have
recently been selling their stock to buyers who want exposure to
these fast-growing enterprises, the FT said.

The SEC could not be immediately reached for comment by
Reuters outside regular U.S. business hours.
(Reporting by Abhinav Sharma in Bangalore; Editing by Jon
Loades-Carter)

SEC probes trading in privately-held Internet firms -reports