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

Goldman Sachs this week approached its best private wealth clients with a tantalizing offer: a special fund that will own shares in the fast-growing social networking giant. Goldman gets to offer clients a hot investment opportunity, while Facebook gets to remain a private company.

It is the latest in a growing trend: the blurring of public regulated markets and hands-off private markets.

That trend had drawn the attention of the Securities and Exchange Commission, which now must determine if it can build an enforcement case cracking down on investors and companies potentially skirting the rules on the books, or if it needs to clarify those rules itself.

You have a lot of people who could probably create private markets that rival the public ones to deliver large amounts of capital to big companies without triggering all the burdens of being a public company, said Donald Langevoort, a professor of securities regulation at Georgetown University.

Small companies traditionally launch with the ultimate goal of completing an initial public offering and obtaining a listing on a national exchange. Yet reporting requirements and other regulatory hurdles have made that path less attractive, while new technology and alternative sources of capital make going public less critical.

That has contributed to a rise in online trading platforms that match buyers and sellers of privately held companies.

SecondMarket Inc, an online platform that hosts the trading of shares in Facebook and other private companies, on Monday told Reuters it received a request for information from the SEC on Friday. The SEC declined to comment on a potential probe into private market trading.

Under U.S. securities law, if a company's private shares are held by more than 500 holders of record, the company is required to register with the SEC and file public disclosure statements. But the rules generally define the term record holder as the name displayed on the company's stock record, and not the beneficial owner of the stock.

That means firms like Goldman Sachs can potentially skirt public disclosure rules through the use of a special investment vehicle. These funds can offer numerous investors the opportunity to buy stock, but the shares are all listed in the name of Goldman Sachs and only count as one shareholder of record.

Some securities lawyers say the SEC could choose to intervene if it concludes Facebook intends to skirt disclosure rules.

It would not strike me as unusual for the SEC to be thinking about it and having to come to grips with it, because of the public notoriety around this transaction, said Stanley Keller, a lawyer at Edwards Angell Palmer & Dodge in Boston.

When you combine this deal with the secondary market activity taking place, it makes it more problematic for Facebook avoiding crossing over the 500-holder threshold.

Google, another fast-growing Internet company, had also avoided an IPO until trading activity in employee options drew the scrutiny of the SEC. Google went public in 2004.

Several securities law experts note the Facebook fund, if unchallenged, could have major ramifications for other private companies and for Wall Street.

But if companies are closely following all the rules for offering private shares, there may not be much the SEC can do on the enforcement side.

Assuming they took the steps that were necessary to comply with existing rules and regulations, absent fraud or other extenuating circumstances, even though the SEC may not like it, there's probably not much they can do, said Brian Breheny, a former SEC deputy director of corporation finance who is now a partner at law firm Skadden Arps.

This is not the first time the SEC has been faced with the issue of whether it needs to update its registration rules for over-the-counter equities. In 2003, some investors urged the SEC to count beneficial owners amid concerns that companies were intentionally deregistering their securities to avoid disclosure rules.

Lawyer Stephen Nelson, who represented those investors, said he thinks many of those same issues are still relevant. He said the recent financial crisis underlined that regulators need as much information as possible to effectively police markets.

When you have entities out there like Facebook, unregistered and not providing information to the SEC about their activities, the more of that kind of stuff that goes on, the dumber your regulators get and the worse their decision-making gets, he said. And that scares me.

(Additional reporting by Jonathan Spicer; Editing by Steve Orlofsky.)

Goldman sachs Facebook