SEC investigating Fcebook's IPO

The Securities and Exchange Commission’s probe into trading of Facebook shares on private marketplaces has some asking whether the regulator might pressure the social network to have an initial public offering.

An article in The New York Times says the SEC gave Facebook permission to grant restricted stock to its employees without having to list them publicly and make the financial disclosures required of public companies.

Federal law draws the line between public and private at 500 shareholders. Facebook obviously has more than twice that number of employees, but the SEC might be concerned with how many stakeholders aren’t employed by the social network.

The auctions on SecondMarket and SharesPost of Facebook holdings are currently limited to professional investors. But new funds that own some of these shares potentially give access to a wider array of buyers.