The SEC today sent out an investor alert, warning the public to avoid unsolicited opportunities to “buy pre-IPO shares of Facebook, Twitter, Groupon or other popular companies.” I know, I know: Zynga must be pissed to have been left out.
One would hope that such a warning would be common sense, but I’d also think that most people wouldn’t wire money to the transient prince of [insert your favorite African nation here]. From the alert:
What I find particularly interesting here is that the SEC made no attempt to separate legitimate second market buyers from the scam artists. It’s not as if the Agency doesn’t know the difference, given that it’s opened an inquiry into the former group (which only solicits accredited investors, and which does actually buy the shares it promises to buy — or else it returns the money).
Or maybe, just maybe, this is an indication that the SEC doesn’t believe the lines of demarcation are quite so clear…