Who Has To File Form 144?
Rule 144 of the Securities Act of 1933, as amended provides a safe harbor for certain public resales of securities, if certain conditions are met. Rule 144 applies to unregistered shares acquired directly from an issuer, (“restricted securities”), and unrestricted shares held by an affiliate of the issuer (“control securities”). Under some circumstances, persons who rely on Rule 144 must file a “Notice of Sale” on Form 144 with the Securities and Exchange Commission (the “SEC”). This blog post addresses some recent questions we received about the SEC’s requirements for filing a Form 144 – Notice of Sale.
Q. Who is required to file a Form 144?
A. Form 144 must be filed by persons who are affiliates of the issuer or persons who were affiliates during the 90 days preceding the proposed sale.
Q. Do affiliates of non-reporting companies have to file a Form 144?
A. Yes, affiliates of both reporting and non-reporting companies must file a Form 144.
Q. When is Form 144 required to be filed with the SEC?
A. Form 144 must be filed at the time the order to sell is placed with the broker, if the number of shares exceeds 5,000 shares and the aggregate sale price exceeds $50,000.
Q. How is the Form 144 filed?
A. Three copies of the Form 144 are required to be filed with the SEC. A copy must also be filed with the principal exchange where the securities are traded. The SEC does not require that the Form 144 be filed electronically on EDGAR, but filers may voluntarily file the form on EDGAR.
Q. Can Form 144 be amended?
A. A filer can correct misstatements and/or omissions in the Form 144 by filing an amendment to the form.
Q. If I file a Form 144, do I have to sell my shares?
A. A person filing a Form 144 must have a bona fide intention to sell the shares within a reasonable time after the filing of a Form 144. However, the filing of Form 144 does not prevent the filer from changing their decision about selling their shares or obligate the filer to sell their shares.
Q. What representations are contained in a Form 144?
A. Form 144 contains representations about the identity of the filer and the shares subject to the notice. Form 144 also includes a representation that the filer is not aware of any non-disclosed material adverse information about the issuer whose securities it proposes to sell.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855