UPDATE 1-US eyes trading in unlisted Internet cos-reports

* SEC sends letters to traders of unlisted companies

* SEC seeks info on how such companies are valued

* SEC declines to comment
(Adds response from SEC)

Dec 29 (BestGrowthStock) – The U.S. securities regulator is looking
into 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

SEC spokesman John Nester declined to comment to Reuters on
the Journal report.

An emerging crop of online trading services such as
SharesPost and SecondMarket facilitate share trading of
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 newspaper

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.
(Reporting by Abhinav Sharma in Bangalore; Editing by Derek

UPDATE 1-US eyes trading in unlisted Internet cos-reports