SEC opens new inquiry into issued Google stock

State regulators from California and elsewhere have also requested more information about the shares, according to registration documents filed with the SEC. On Aug. 5, Google began offering to rescind nearly 28 million shares issued over the last three years, because it failed to register them under the law.

"If it is determined that we offered securities without properly registering them under federal or state law, or securing an exemption from registration, regulators could impose monetary fines or other sanctions as provided under these laws," according to Google's filing.

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The warning is only the latest for the search company, as it approaches a long-awaited initial public offering, an auction of about 24.6 million shares that could be closed as early as Tuesday evening. Google, which expects to raise between $2.7 billion and $3.3 billion, has asked the SEC to declare the registration of its IPO shares effective Tuesday at 1 p.m. PDT, according to a notice posted Monday on its IPO Web site.

Last Friday, Google filed an amendment to its prospectus cautioning investors that a recent Playboy magazine article featuring company co-founders Larry Page and Sergey Brin could violate SEC rules governing its "quiet period." The company said it would vigorously fight any such determination on the part of SEC regulators, however.

Google also announced its share buyback offer in a recent filing, drawing investor concern. Securities attorneys and investment bankers said it's not uncommon for a company to forgo registering its shares before filing initial IPO documents. But the number of unregistered shares involved sets Google apart, attorneys say.