By Agency Reporter

SAN FRANCISCO/NEW YORK: The buying frenzy over hot Web companies from Facebook, Zynga and Twitter to smaller shops such as Norins’ Nor1 have pushed companies to take action.

Since Facebook began tightening guidelines on the trading of its shares on secondary markets about a year ago, the top privately held Web companies have followed as the race to snap up pieces of pre-IPO companies has attracted the scrutiny of United States regulators, Reuters reported on Tuesday.

Twitter, one investor told Reuters, had made it nearly impossible to buy shares if buyers did not already own any.

The top 20 private Internet companies that trade on these exchanges “are all taking steps to control the process,” the Twitter investor added.

A lawsuit filed by a would-be shareholder of Zynga last week highlighted the extent to which some companies have sought to clamp down on the explosion of activity.

“I brokered sales in the past in that company (Zynga) and it was fairly easy. They were friendly,” said Larry Albukerk, a managing partner at EB Financial Group, which acts as a broker for secondary market transactions.

More recently, the deals have been difficult.

“The deal didn’t get done because the company basically didn’t want it to happen,” Albukerk said, adding that he respected the rights of these companies to limit trading in their shares.

LinkedIn, the professional social networking service, which in late January filed to float shares to the public, blocked new investors from buying them ahead of the filing, he said.

The tightening of guidelines imposed by some companies comes as the US Securities and Exchange Commission considers revising rules for the trading of stock in privately held companies, SEC Chairman, Mary Schapiro told Reuters last week.

“The issue is whether investors have access to financial information … to make reasonable and rationale decisions about investing,” Schapiro said.

Source: Punch