Rule 144 Letters Written By Securities Counsel
Perhaps the most common type of securities attorney opinion letter for the sale of restricted stock is the Rule 144 opinion letter. A 144 opinion is written by a securities attorney after careful research of not only the issuing company, but also the current Shareholder and all predecessor holders of the stock.
Rule 144 Exceptions to SEC Registration of Restricted Stock
Rule 144 deals with exceptions to registered securities and it is basically a safe harbor, or series of opportunities for Shareholders to sell restricted stock without SEC registration of the securities. Several different rules exist for how long an investor must own or hold the stock, and a lot depends on whether or not the Shareholder is or was an Affiliate of the issuing company.
What is an Affiliate According to Rule 144?
An Affiliate is basically an “insider” and Rule 144 has many different criteria for deciding if one is an Affiliate. However, in a broad sense Affiliates include officers, directors, founders and their immediate family members living in the same household because they are all presumed to have control over the company and thus the stock. Another name for an Affiliate is a “control person.”