Get the SEC Form 144 (SEC 1147) 2007-2020

This is a video by John Lux on a trap for the unwary an SEC rule 144 first the disclaimers this is not legal or investment advice of any kind seek competent advice from qualified attorneys your situation may vary the more you know about finance and business the more you can profit the doctrine of acting in concert can be a trap for the unwary under Sec rule 144 SEC rule 144 is the primary tool for making sales in the public market of securities acquired from a public company or its affiliates in a transaction that it did not involve a public offering so if you bought stock in a public company in a private transaction you may sell into the public market if you meet certain conditions rule 144 has different requirements for affiliates and non affiliates generally affiliates are persons that directly or indirectly control or are controlled by the issuer for non affiliates these limitations generally involve adequate current public information on the company and an adequate holding period after the securities are acquired and fully paid for for affiliates there are also restrictions on the manner of sale volume limitations and a notice requirement we focus here on the volume limitations rule 144 3 e6 provides that when two or more affiliates or other persons agree to act in concert for the purpose of selling securities of an issuer all securities are the same class sold for the account of all such persons during any 3-month period shall be aggregated for the purpose of determining the limitation on the amount of securities sold in other words when two or more persons agree to act in concert to sell securities all securities sold by them during any 3-month period or aggregated for the volume limitations we find that affiliates may overlook the fact that their sales will be aggregated with sales of others with whom they are acting in concert there are many facts situations where people would be acting in for example two persons coordinating the timing of sales of their securities might be deemed to be acting in concert more subtly if both sellers accounts were run by the same investment advisor these sellers might be deemed to be acting in concert if an affiliate of an issuers the General Partner of limited partnerships which hold or held restrictive securities of the issuer the affiliate may be aggregated with the partnerships and their partners further aggregation may also be required if the affiliate is acting in concert with other persons under rule 144 III six we therefore warn you to be aware of this provision of rule 144 and act accordingly violating rule 144 is selling restricted stock as free trading stock and the penalties are severe non affiliates can be aggregated with other holders so they control enough stock to be affiliates seek competent legal counsel to make sure you are in compliance questions you can email me at john dot lux at securities - law info subscribe to my blogs reverse - merger dot info and securities - law info