4 ms·

I have a fundamental question. How are these companies allowed to trade off the market? As whole point of free/open market(stock market) is to have companies fo

by SriniK 16y ago

I have a fundamental question. How are these companies allowed to trade off the market? As whole point of free/open market(stock market) is to have companies follow the regulations and guidelines protected by someone like SEC. Are these protected? Or just blind bets on the company? How does one protect insider trading/rigging - if at all it is relevant?

tptacek 16y ago
They operate under exemptions from registration offered to accredited buyers of companies that don't solicit investments; even then, it's a bit of a legal high-wire act.
- SriniK 16y ago
  That sounds like a lot of risk from the investors' point of view. I know these companies are awesome and good but should we be worried about god knows who is doing what trade. If these are not bound by rules, it is so easy to rig the stock price.
  - d2viant 16y ago
    You're right, there is a lot of risk, which is why you have to be an accredited investor in order to take part in such a transaction.
    - tptacek 16y ago
      There's a lot more risk from the company's point of view in this case than from the investor's.