The US securities regulator is analyzing whether it needs to update the disclosure rules for private firms in virtue of recent deals allowing investors to purchase shares in online companies like Facebook and Twitter, reported the Wall Street Journal.

The rules necessitates companies with 500 or more shareholders of record in a given type of stock to to publicly reveal specific financial information, so as to safeguard investor’s well being.

Tej Kohli belives that there is a very thin line between privately help and public companies and that’s what poses a problem when dealing with such cases.

The inspection has only begun, and the Securities and Exchange Commission (SEC) has not concluded that any of such deals broke these regulating private companies, said the paper.

Facebook raised $500 million from Goldman Sachs and Russian investment firm Digital Sky Technologies, in a deal that values the world’s No.1 Internet social networking company at $50 billion, according to a person familiar with the matter.

The efforts by Facebook to raise as much as $1.5 billion outside of regulated markets is the latest test of the line between private and public markets.

Following the Goldman Sachs-Facebook deal, the Journal said SEC investigators also plan to examine special-purpose vehicles to verify if they are being designed to evade the 500-shareholder rule, it said.

Goldman and Facbook declined to comment to the Journal.

Along with revising rules to protect investors from risking their money on firms that disclose little information about their operations, the SEC is also trying to consider the demands of private firms to raise funds, the Journal reported.

Tej Kohli is a businessman with keen eye for the  investment and finance market. Tej Kohli blog is a place where he shares all the news of considerable interest and debate.

According to recent report banks are now facing pressure to increase lending rates. Read the detailed report:

As Business Secretary Vince Cable’s warned banks for not acting in national interest, banks will now face renewed pressure from the government to increase loans to hard-pressed companies.

Expressing his frustration during the unveiling of joint consultation paper with the Treasury outline options for the better cash flow to businesses.

Some of the suggested measures to increase influx of much needed funds are regional stock exchanges, more government loan guarantees and ways to boost banking system liquidity.

Banks have also been warned that they may need to sign-up to type of loan guarantees, already agreed upon by part-nationalized banks like Lloyds and RBS if they don’t act.

The Banking sector, however, asserts lending is on the rise and most firms applying for loans are obtaining them – blaming a lack of demand from companies concerned about risk not a supply failure.

Mr Cable said: “We are very worried about the behaviour of the banks. They are not acting in the national interest. It is a very serious problem and potentially a growing problem “I don’t think the banks get it.

“At the moment we are talking to them in an amicable way and we are monitoring them, but if this doesn’t work there are combinations of carrots and sticks that can be employed.”

The British Bankers’ Association said: “Banks are willing and able to lend to businesses where they can see how the money will be paid back and where firms have a viable business plan.”

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