[serge2k]

How does a market that lets people buy and sell shares without the company going public not get immediately slapped around by the SEC?

This all just feels wrong to me. As an employee selling shares how can I be sure I'm not getting screwed over by anyone? The entire thing just seems shady.

[gilbug]

As the company's in-house lawyer, I see that people who have a lot of stock have generally hired a wealth manager, financial advisor, or personal lawyer who advises them on transactions, or learn through colleagues who have done so. Some lawyers specialize in employee equity, or private transactions more generally. Shares of stock can be bought and sold like other financial assets, subject to any regulations and contract obligations that apply. That's a definitional attribute of stock and other securities. Public markets are a layer on top of that, not something fundamentally different. Employee shareholders who are not directors, officers, or 10% owners generally fall under a 4(a)(1) exemption from registration. There are a bunch of online resources on the topic, for example http://securities-law-blog.com/2015/06/23/section-4a1-4a1%C2... (no connection and not an endorsement, the site just looks helpful).