In early December, an individual investor in Facebook shared with me the talk among in-the-know investors: that the limited liability companies being created to buy shares of Facebook stock on the secondary market were somehow exploiting an SEC loophole that limits the number of shareholders in private companies to 499.

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The secondary market for private equity assets appears to have strengthened radically this fall, along with the dramatic rise of the stock market and as non-traditional players have emerged as interested buyers in the secondary market for private equity fund stakes.

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These secondary-market transactions are the same as an individual buying stock in General Electric betting it will rise.

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The stock immediately rallied higher as soon as it became available on the secondary market.

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This limited secondary market, the rail operators argue, means that they cannot justify spending large sums on rolling stock unless they are sure of keeping their franchises long enough to recover their investments.

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