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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 them

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.

bretpiatt 16y ago
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.aspx http://www.sungard.com/aboutsungard/financialinformation.asp... 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.
- ROFISH 16y ago
  Wouldn't SOX also come into play?
  - sabat 16y ago
    No, because SOX (the law) only covers publicly traded companies.
trotsky 16y ago
There is a strong possibility the firms themselves have complained about the secondary markets and the private stock funds. If they became big enough, employees could potentially undercut their employer on future funding rounds. There is also the widely held belief that employees will work harder and be less likely to quit if they can't benefit from the appreciation of their shares until a liquidity event. Also, pricing in the secondary market by insiders could signal if a company is having troubles, something that they might otherwise be able to prevent from leaking out. You can see the results of these worries in facebook contracts that prevent current employees from selling their vested shares and the deal they struck in 2008 that allowed employees to sell only a 20% share of their vested options. If they were able to prevent ex-employees from selling their shares on the secondary markets they obviously would. So it would make some sense if the companies themselves are complaining about the practice to the SEC.

bretpiatt 16y ago

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.aspx http://www.sungard.com/aboutsungard/financialinformation.asp... 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.

ROFISH 16y ago
Wouldn't SOX also come into play?
- sabat 16y ago
  No, because SOX (the law) only covers publicly traded companies.

trotsky 16y ago

There is a strong possibility the firms themselves have complained about the secondary markets and the private stock funds. If they became big enough, employees could potentially undercut their employer on future funding rounds. There is also the widely held belief that employees will work harder and be less likely to quit if they can't benefit from the appreciation of their shares until a liquidity event. Also, pricing in the secondary market by insiders could signal if a company is having troubles, something that they might otherwise be able to prevent from leaking out. You can see the results of these worries in facebook contracts that prevent current employees from selling their vested shares and the deal they struck in 2008 that allowed employees to sell only a 20% share of their vested options. If they were able to prevent ex-employees from selling their shares on the secondary markets they obviously would. So it would make some sense if the companies themselves are complaining about the practice to the SEC.