Affiliates Can Sell Stock After 90 Days under Rule 144

When Can Affiliates Sell 144 Stock Without Volume Restrictions?

Under SEC Rule 144, a former officer, director, or control person of an OTC public company can sell his or her shares without the trading volume restriction if greater than 90 days have past since that person ceased to be an Affiliate.

How To Document Non Affiliate Status Under Rule 144

When former officers, directors and large shareholders of OTC Bulletin Board and OTC Markets companies cease to be affiliates, these documents are helpful to a securities attorney drafting a Rule 144 letter:

  1. Letter of Resignation when the officer or director resigns or steps down;
  2. Board of Director’s Resolution accepting the officer or director’s resignation and appointing someone else;
  3. OTC Markets or SEC filings such as 8-Ks that reference the former Affiliate’s resignation, etc.
  4. And in the case of a large shareholder who no longer owns greater than 10% of an Issuer’s outstanding stock, a shareholder’s list showing when he or she dropped below 10%.

An experienced securities attorney can help the Shareholder gather these documents, all of which can be cited in the restricted stock opinion under Rule 144.

Former Affiliates can contact securities lawyer Matt Stout at OTCLawyers.com for further information on how the 90 days is calculated and how to document non affiliate status under Rule 144.

 

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