Shareholders of OTC Bulletin Board and OTC Markets OTCQX, OTCQB and Pink Sheets Issuers who purchase stock privately usually have stock certificates bearing a Rule 144 restricted legend. The same is true when Shareholders receive stock in Over-the-counter microcap public companies in exchange for services, such as consulting.
This 144 legend tells the Transfer Agent and a prospective purchaser of the OTC stock that a legal opinion from an experienced securities attorney will be required before the securities can be sold under the provisions of SEC Rule 144.
The Process of Removing the 144 Legend
The process of removing the restricted or restrictive legend under SEC Rule 144 is straightforward for the Shareholder:
- The Shareholder contacts a securities lawyer and provides a copy of the certificate and all supporting documentation showing the origin and history of the restricted shares;
- The securities lawyer reviews the Shareholder’s documentation, and reviews the OTC Bulletin Board or OTC Markets Issuers filings at SEC.gov and OTCMarkets.com;
- If necessary, copies of agreements, letters from the Shareholder and/or Issuer, and board resolutions are requested to further document the transaction; and
- If the elements of Rule 144 are met, the securities lawyer drafts a Rule 144 opinion addressed to the transfer agent, citing each document and filing reviewed.
An Experienced Securities Attorney Can Help
Shareholders of OTCBB and Pink Sheets issuers can make the process of removing a restricted legend from 144 stock easier by contacting an experienced securities lawyer like Matt Stout at OTCLawyers.com or MJWStout.com. If the requirements of SEC Rule 144 are clearly supported by the documents provided and the Issuer’s filings, a legal opinion can be issued promptly. Where information or documents are missing, a securities lawyer can work with the Shareholder, Issuer, Broker and Transfer Agent to confirm details and check facts.