144Letters.com
Changes to Rule 144
& Restricted
Shareholders FAQ's
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Summary of
Rule 144 changes, effective February 15, 2008:
Restricted
Securities of Reporting Companies:
Affiliates, or persons selling on behalf of affiliates - after a six month
holding period may resell in accordance with Rule 144's standard requirements:
current public information, volume limitations (1% of outstanding shares per
90 day period), manner of sale (ordinary stockbrokerage transactions), and
filing of the Form 144.
Opinion letter of attorney required for transfer agent.
Non-affiliates - after a six month holding period may resell unlimited number
of shares of reporting companies - company must have been and remain current
in it's reporting. After one year, unlimited public resales under new Rule 144,
need not comply with other Rule requirements or limitations, and no Form 144
is required to be filed. Opinion letter of attorney
required for transfer agent.
Restricted
Securities of Non-Reporting Companies:
Affiliates, or persons selling on behalf of affiliates - after one year, may
resell in accordance with all Rule 144 provisions including current public
information, volume limitations, manner of sale, and filing of Form 144.
Opinion letter of attorney required for transfer agent. Caveat 'shell company'
rule discussed below.
Non-affiliates -
after one year, unlimited public resales permitted under new Rule 144, if not
an affiliate or control person within prior 90 days - need not comply with
other Rule 144 requirements or limitations, and no Form 144 is required to be
filed. This section is equivalent to the old Rule 144(k), which formerly required a two year holding period. Opinion letter of
attorney required for transfer agent.
If the issuing company is now, or ever
has been, a shell company (basically a company without assets or operations,
often involved in reverse mergers) the company must come into compliance and
become a reporting company for 12 months before sales of both restricted and
unrestricted securities may take place. This complex and confusing rule is
likely to be clarified by the SEC, but at this time, good communication with
the company and the transfer agent are necessary for these sales to be
approved - the attorney's opinion letter must also clearly address the issue.
Transfer agent usually a form addressing this issue which should be signed by the company president, notarized,
and sent to us and the transfer agent to facilitate the process. If they
don't, I can supply one upon request.
Please note - the foregoing is a simplification of the changes to Rule
144 and is general information only, not a legal opinion or legal advice.
Certain persons, certain activities, such as hedging transactions, and certain
scenarios may not be available. ONLY the opinion of an attorney
experienced in these matters should be relied upon.
Who removes the restriction?
The stock transfer agent will "remove" the restriction, and put the shares
into street name - but will only do so after obtaining the permission of the
issuing corporation along with the opinion letter of 144 counsel. The opinion
letter is generally sent to the transfer agent from the brokerage's compliance
department. Original opinion will be sent to transfer agent upon
request.
How do I sell the stock?
Sales of stock under Rule 144 must be made through a stockbroker in an
ordinary transaction - ask your broker to call us or visit our website if not
already familiar with Rule 144.
How long does it take?
It depends on the stock transfer agent, stockbroker, corporation and attorney
working together. My opinion letter is usually prepared and faxed to
stockbroker that day, or within 24 hours - after that, it is up to the broker
and stock transfer agent to complete the process.
How
do I get started?
Please call toll-free to 800-530-2783 with any
question or concern, review the information below, or use the links ...
click here
for quick start
Use order form/fax to request a
letter!
Send or fax over a copy of the certificate
and make payment through Pay Pal, or by check, payable to Brian Reiss, Esq.
– Pay Pal is preferred for 24 hour service – or, make a copy of the check
and fax over prior to mailing for quickest service.
Corporations
Stockbrokers
Full Text of New Rule
144
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144Letters.com is a division of the Law Offices of Brian R. Reiss, located in
Huntington Beach, California, since 1979 - you're in another state or country?
no problem... since Rule 144 is a federal code, we are able to offer our
services to both national and global clients, reporting and non-reporting
corporations, and stock professionals across the land... you will find our
service to be friendly, efficient, and reasonable.
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Note - the information in this site is for general use only, and does not
substitute for a legal opinion.
Please note: the opinion does not attest to the viability of the issuer or the
marketability of the shares, nor is an attorney-client relationship created
with any party.
©2002 - 2010 Brian R. Reiss, Attorney at Law