Posted On: 03/30/2014 6:57:10 PM
Post# of 36729
Re: AmericanSavage #29779
"SEC Rule 144 allows holders of restricted or control securities to sell those securities in the open market provided certain conditions are met by the seller, the broker and the company. Restricted securities: In general, restricted securities are acquired in a nonpublic transaction (private placement). Such securities are unregistered, can only be resold under certain conditions, and usually bear a legend to that effect."
From web:
Definition of 'Unregistered Shares'
Securities that are not registered with the Securities and Exchange Commission. Unregistered shares, also called restricted stock, are usually issued through private placements, Regulation D offerings, and employee stock benefit plans, or as compensation for professional services or in exchange for funding a start-up company. For example, a privately held company might issue unregistered shares to its executives and board members as part of their compensation package.
Unregistered shares have fewer investor protections and different risks compared to registered securities. As a result, companies can only sell unregistered shares to “qualified investors.” Qualified investors are comprised of high net worth ($1 million or more) and/or high-income ($200,000/yr. or more for individuals, $300,000/yr. or more for married couples) investors that the SEC considers savvy enough to make such investments. In the past, soliciting or advertising unregistered shares was prohibited, but in 2013, the SEC adopted Rule 506(c), allowing certain unregistered securities to be solicited and advertised.
SEC Rule 144 lays out the conditions under which unregistered shares may be sold. They must be held for a prescribed period, there must be adequate public information about the security’s historical performance, the sale must be of less than 1% of shares outstanding and less than 1% of the previous four weeks’ average trading volume, all normal trading conditions that apply to any trade must be met and sales of more than 500 shares or more than $10,000 worth must be preregistered with the SEC. An exception to this last condition occurs if the seller is not associated with the company that issued the unregistered shares (and has not been associated with it for at least three months) and has owned the shares for more than one year.
From web:
Definition of 'Unregistered Shares'
Securities that are not registered with the Securities and Exchange Commission. Unregistered shares, also called restricted stock, are usually issued through private placements, Regulation D offerings, and employee stock benefit plans, or as compensation for professional services or in exchange for funding a start-up company. For example, a privately held company might issue unregistered shares to its executives and board members as part of their compensation package.
Unregistered shares have fewer investor protections and different risks compared to registered securities. As a result, companies can only sell unregistered shares to “qualified investors.” Qualified investors are comprised of high net worth ($1 million or more) and/or high-income ($200,000/yr. or more for individuals, $300,000/yr. or more for married couples) investors that the SEC considers savvy enough to make such investments. In the past, soliciting or advertising unregistered shares was prohibited, but in 2013, the SEC adopted Rule 506(c), allowing certain unregistered securities to be solicited and advertised.
SEC Rule 144 lays out the conditions under which unregistered shares may be sold. They must be held for a prescribed period, there must be adequate public information about the security’s historical performance, the sale must be of less than 1% of shares outstanding and less than 1% of the previous four weeks’ average trading volume, all normal trading conditions that apply to any trade must be met and sales of more than 500 shares or more than $10,000 worth must be preregistered with the SEC. An exception to this last condition occurs if the seller is not associated with the company that issued the unregistered shares (and has not been associated with it for at least three months) and has owned the shares for more than one year.
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