SecondMarket has drawn the attention of regulators, with the SEC keeping a close eye.
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Adam Oliveri, head of SecondMarket's private-company market, said most of its investors are long-term.
Does Mr. Silbert really support fixes to the public markets, given SecondMarket's private-market business niche?
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Criticism about SharesPost and SecondMarket have focused on the lack of regulation and opacity behind these market-makers.
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Signing up Li Ka-shing as one of its investors will certainly help put SecondMarket on the map in Asia.
In 2007, a former Facebook employee approached SecondMarket looking to sell stock options, so the company surveyed its clients.
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SecondMarket requires companies to provide "audited financials and risk factors" to potential investors.
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In a statement, SecondMarket said, ""We believe this lawsuit is without merit, and we have no further comment at this time.
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This set up is different from AngelList, which has partnered with SecondMarket, which is a registered broker-dealer, to handle the transactions.
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Mr. Moe said he bought the shares from Facebook employees through SecondMarket.
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Four charts from private stock trader SecondMarket paint an interesting picture.
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Facebook, while having only recently gone public, was a test case for those exchanges, like SecondMarket, where pre-public companies can be traded.
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SecondMarket doesn't disclose the identity of its clients to outside parties, however.
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Over the past year, he has invested using AngelList-SecondMarket, FundersClub, and MicroVentures.
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David Williams, a start-up investor at 2020 Ventures LLC, said he started buying Facebook shares in the past year on SecondMarket and SharesPost.
Past Facebook transactions have occurred through private equity deals or have traded on exchanges like SecondMarket, which specialize in unregistered, hard-to-trade securities.
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Claims were traded in 40 separate cases in January, SecondMarket said, representing an 8% increase from the number of cases that traded in December.
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Investors are buying up such shares through through companies like SecondMarket.
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This is different from SecondMarket or Sharespost, which enable secondary transactions.
Investors participating in the seed round include SecondMarket founder Barry Silbert, Spotify investor Shakil Khan, Jimmy Furland, Roger Ver, and other Internet entrepreneurs.
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The face value of claims transferred during the month dropped to its lowest level since August 2011, SecondMarket reported, while the number of claims increased 10% month-over-month.
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Many of the Facebook shares are being sold by former employees in deals arranged on private-stock exchanges like SecondMarket and SharesPost, which match buyers and sellers.
First, SecondMarket changes how pre-IPO companies can compensate their employees.
SecondMarket, an online platform for these types of transactions, has experienced a boom in traffic and volume, capping off its most successful fourth quarter and full year ever.
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The tool is powered by New York-based SecondMarket, an investment platform that is licensed by the U.S. Financial Industry Regulatory Authority and U.S. Securities and Exchange Commission as a broker-dealer.
For now, the AngelList "Invest" tool is free for startups and investors to use while AngelList and SecondMarket figure out a way to monetize it, but many angels are cautious.
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People at SecondMarket declined to comment on the story.
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" So he proposes an SEC-administered "financial literacy test" that would allow those who pass it to participate in SecondMarket and "any type of investment that is not an SEC-registered investment product.
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The potential of an S-1 filing this October will surely also drive up interest in secondary transactions through sites such as SecondMarket and Sharespost, as well as special purpose vehicles targeting Facebook stock.
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