Tech Startup Funding Frenzy Prompts SEC Scrutiny of Brokers
- Chair White says agency concerned about `aggressive promoters'
- Investors clamoring for stock as companies stay private longer
Shares in file storage company Box Inc. have fallen 31 percent since it began trading last year, and online crafts marketplace Etsy Inc. has dropped 54 percent.
Photographer: Victor J. Blue /BloombergThis article is for subscribers only.
Slumping valuations for once-hot technology companies after they go public are drawing increased scrutiny from U.S. regulators.
Securities and Exchange Commission Chair Mary Jo White expressed concerns that some stock brokers may be painting too-rosy of a picture of private tech companies. Anytime there is a “significant” change in how much a company is worth after an initial public offering, it raises questions about the impact on investors who purchased unlisted shares, White said Tuesday.