Earlier this year the social networking site Facebook grew concerned that an obscure securities regulation might force the privately held company into the spotlight. Under the Securities & Exchange Act of 1934, a private company must start disclosing financial results publicly once it has more than 500 stockholders and $10 million in assets. It's the same law that helped push Google (GOOG) to go public back in 2004.

Facebook doesn't have 500 shareholders yet, but it's fast approaching that threshold as it hires new employees who often get equity in the company. In a letter written to the SEC obtained by BusinessWeek, lawyers from Facebook counsel Fenwick & West wrote that the company "anticipates that it could in the future have more than 500 holders" of restricted stock. In the 10-page letter, Facebook argued that there's no need to meet the SEC disclosure requirements, since only insiders are getting the equity, and they're not paying for it.

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