SEOUL/WASHINGTON | Wed Jan 5, 2011 5:58pm EST
SEOUL/WASHINGTON (Reuters) - North Korea called on Wednesday for unconditional talks with the South but the United States suggested it must first stop provoking its neighbor, recommit to a 2005 nuclear pact and take responsibility for recent attacks.
It was uncertain whether the South would heed the North's call less than two months after the North Korean military on November 23 bombarded a South Korean island off disputed waters, killing four people.
The artillery fire, and the March 2010 sinking of a South Korean corvette blamed on the North despite its denials, have raised tensions in Asia and added pressure to try to resume talks with the North on curbing its nuclear programs.
"We demand unconditional talks between responsible authorities (of the South and the North)," the North's KCNA news agency quoted a statement, which, in an unusual step, was issued collectively by the North's government, the ruling Workers' Party of Korea and other organizations.
"We are prepared to meet with anyone regardless of the past if it is someone who is willing to go hand-on-hand with us to the future," it added.
It further proposed "discontinuing heaping slander and calumnies on each other and refraining from any act of provoking each other in order to create an atmosphere of improving inter-Korean ties."
While the North's statement seemed conciliatory, the United States made clear it first wanted Pyongyang to take action.
"We're open to dialogue but it's not just for North Korea to say 'OK, fine we'll come talk'," State Department spokesman P.J. Crowley told reporters after the U.S. and Chinese foreign ministers met in Washington.
"There are things that North Korea has to show both South Korea and the United States that it is prepared to have a sustained and constructive dialogue," Crowley said.
"Committing itself that there will be no further provocations certainly would be one step, demonstrating that it is prepared to move forward on its commitments under the 2005 joint statement would be another step," he added.
Under that pact, North Korea pledged to abandon its nuclear programs but the country's reclusive and often unpredictable leaders have made such commitments in the past in agreements that have subsequently unraveled.
Secretary of State Hillary Clinton and Chinese Foreign Minister Yang Jiechi of China discussed the issue among others during a two-hour meeting to prepare for Chinese President Hu Jintao's January 19 state visit to Washington.
The United States has long sought China's help to persuade North Korea, which has twice conducted nuclear tests, to give up its nuclear programs.
The U.S. envoy for North Korea policy, Stephen Bosworth, met South Korean officials in Seoul before heading to China. Washington hopes talks on dismantling North Korea's nuclear work can start soon, though a breakthrough may prove elusive.
HIGH TENSION
Tension on the Korean peninsula rose to its highest levels since the 1950-53 Korean War after last year's sinking of a Southern ship killed 46 sailors, the exchange of artillery fire around the South's island, revelations of fresh nuclear activity by the North and threats of war.
President Barack Obama's national security adviser met China's foreign minister Tuesday in Washington and stressed the need to persuade North Korea to abandon its nuclear weapons work and "avoid destabilizing behavior," the White House said.
In Seoul, U.S. envoy Bosworth met South Korea's foreign minister and nuclear negotiator. Bosworth does not appear to be in the region to unveil a U.S. proposal to get the North back to talks, but said he was collecting views from all sides.
Consultations are likely to focus on whether to restart the so-called six-party disarmament-for-aid talks involving the United States, the two Koreas, Japan, China and Russia.
Asked whether the United States was putting pressure on Seoul, Bosworth said: "Never."
He offered no further comments, saying he was due in China later Wednesday and would be in Japan Thursday.
Speaking after his meeting with Bosworth, South Korea's foreign minister sounded a cautious note about whether the six-party talks could restart, calling them a "useful negotiating tool" for disarming North Korea.
"But the right conditions, including North-South dialogue, are needed for there to be real progress," Kim Sung-Hwan was quoted as saying by the Yonhap news agency.
"It depends on the North's behavior whether it will choose path of conflict or peace."
NEW YORK/WASHINGTON | Wed Jan 5, 2011 8:36am EST
NEW YORK/WASHINGTON (Reuters) - 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."
