> Does anyone know what regulation prevents someone from doing this? The same regulation that pretty much defines modern securities - the Securities Act of 193

> Does anyone know what regulation prevents someone from doing this? The same regulation that pretty much defines modern securities - the Securities Act of 1933. It basically states that securities cannot be offered to the public without first being registered with the SEC, and the company must report all material information related to the security - essentially these requirements are the reasons that companies are avoiding IPOs in the first place. > there is a _huge_ demand for a liquid market for privately held stock Privately held stock is, by definition, privately held and not publicly offered on a liquid market. The only potential loophole I see here is that accredited investors (individuals w/ net worth > $1 mil or income > $200k/yr) are exempt from these rules as they are considered "sophisticated investors". However, a market that's only open to accredited investors probably wouldn't be very liquid.