Current Public Information Requirement Under Rule 144 for Multiple Sales

Sometimes Shareholders, such as Affiliates, will sell stock over time and the question arises whether or not one Rule 144 legal opinion will suffice.   This depends upon how long ago the 144 opinion letter was drafted.  The reason updated legal opinions are requested by brokers and clearing firms is that one of the elements of SEC Rule 144 requires “current pubic information” be made available to investors by the Issuer.

So the question arises, how long will a Rule 144 legal opinion last?   That depends on the broker’s compliance department.

When restricted stock is sold pursuant to Rule 144 in over a 3 month period does the Issuer have to meet the the “current public information” requirement at the time of each sale of stock?

Yes.  This is because the “current public information” requirement under Rule 144 must be met by the Issuer on the date the 144 opinion letter is drafted in order for the Shareholder to sell stock under the Rule 144 safe harbor.  For this reason, the public company must be found to meet this this requirement at the time of each sale.

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