The Quick & Easy Way To Sell Your Company's Stock Without Violation of Rule 144 & Its Traps

If you’re like most public company insider shareholder, then you need to comply with rule 144 of the Securities and Exchange Commission in order to sell your stock. However, if you’ve never done it before, then it may seem confusing and dangerous. And if you have tried to sell a stock when you were an insider shareholder, then you already know that it’s not something you want to do through trial and error.

?That’s why I’ve written this little guide for insider shareholders to sell their company's stock without getting trapped by the hidden obstacles of Rule 144.

?Now you can skip the long learning curve, skip the trial and error and hopefully skip violations that most shareholders make when they try to sell their stock.

?So let’s get started…

The SEC Rule 144 is the primary device for selling securities in the public markets. It's also the device for selling of securities of a public company or its affiliates in which a transaction didn't involve a public offering.

If you have bought stock in a public company through a private transaction, you may sell into the public market if you meet certain conditions. Rule 144 has different requirements for affiliates and non affiliates. Ultimately, affiliates are persons that directly, or indirectly control or are controlled by the issuer.

In regards to non-affiliates, these limitations ultimately involve adequate current public information regarding the company and an adequate holding period after the securities are acquired and paid for.

Affiliates have restrictions in regards to the sale, volume limitations as well as a notice requirement. There is a catch 22 for shareholder's not in the know, and that trap is called the "Acting in Concert".

Here I will focus on the volume limitation and the "acting in concert" doctrine so you do not make the mistake most shareholders make.

In Rule 144 (3, e, vi) claims that "When two or more affiliates or other persons agree to act in concert for the purpose of selling securities of an issuer, all securities of the same class sold for the account of all such persons during any three-month period shall be aggregated for the purpose of determining the limitation on the amount of securities sold:..."

What this means, is when two or more persons consent to act in concert to sell securities, all securities sold by them during any three month period are aggregated for the volume limitations. The million dollar question is, what is the volume limitation?

This directly from the SEC website: https://www.sec.gov/reportspubs/investor-publications/investorpubsrule144htm.html

Trading Volume Formula. If you are an affiliate, the number of equity securities you may sell during any three-month period cannot exceed the greater of 1% of the outstanding shares of the same class being sold, or if the class is listed on a stock exchange, the greater of 1% or the average reported weekly trading volume during the four weeks preceding the filing of a notice of sale on Form 144.?Over-the-counter stocks, including those quoted on the?OTC Bulletin Board?and the?Pink Sheets, can only be sold using the 1% measurement.

Many affiliates overlook the fact that their sales will be aggregated with sales of others with whom they are "acting in concert".

There are many case situations where shareholders will/would be acting in concert. For example, two shareholders coordinating the timing of selling their securities might be an acting in concert situation. Another example is quite discrete, if both sellers' accounts are run by the same investment advisor, these sellers might be deemed to be acting in concert.

If an affiliate of an issuer is the general partner of limited partnerships which hold or held restricted stock of the issuer, the affiliate may be aggregated with the partnerships and their partners.

This is where the term stiff stock comes about. Imagine you floated your company at 100 million market cap and you own the majority of the float and you're only allowed to sell 1% every three months before or after the reporting period. What will your reaction be? I know what a load of crap. You have to ask permission to sell your stock!

There is a way around it and your investment banker will not tell you because it's against his interest. However that's for another time.

Violating Rule 144 is by selling restricted stock as free trading stock and the penalties are harsh. So my advise is seek competent legal opinion before floating or selling securities to make sure you are in compliance.

Now if you want to learn more tips and tricks subscribe to the newsletter.

In monopoly (UK Version) it works out that Pentonville road, Angel of Islington & Uston, the light blue sites on the left give you 159% return and are the best in terms of arithmetical return but the dark green sites which are what people think that are better Oxford Street, Bronze Street, and Regent Street only give you 101% return so they are very bad. The next best sites are the orange ones which are Bow Street, Vine Street, and Malbrough Street. They give you 141% return but they are better than Pentonville Road, Uston & Angel of Islington because there is an increased incidence of landing on them.?You land on them more often and the reason for that is, there is a card in the chance that orders you to go to jail. And if you go to jail, you are past the blue sites and about to land on the orange ones. In addition to that, there is another card in chance, ordering you to advance to Pall Mall which does the same thing, it takes you past the blue sites and another one demanding to advance to Marly Bourne Station.

There’s also another one demanding you to go back three spaces, which in one position will land you on Vine Street. So there’s an overwhelming case for having the orange sites. Now, most people do not know that.??

Quote

"Life is movement and movement in my opinion is represented as a wheel. It may be a car wheel, bicycle wheel,?or even a semi-truck wheel. In the end, you choose the size, width,?and type of rubber. What’s even better, you also have a choice to fill it with more air than the recommended pressure (for some that’s un heard of), however, one thing is crystal clear; to live a full life and have choices you must be willing to transform into a wheel rather than being a spoke on that wheel."

Amer Alamer (aka. Lamar Sidwell) is?venture capitalist and an expert in structuring real estate and business transactions. He is active in the mergers and acquisitions space as well as property development. He has been awarded three Real Estate Development Awards 2019-2020 (Best Developer Europe, Best Fiver Star Developer Turkey, and Best International Developer) by UK members of parliament and 80 other prominent judges at Prince Waleed Bin Talal’s hotel, the Savoy Hotel in London. Amer Alamer also helps small to medium-sized enterprises scale and exit by using public vehicles. He is also the winner of the Gold Stevie Awards 2021 for best innovation in the Financial Industry Middle East.

He is an author of How To 144X Your Options In Life which teaches how to structure real estate and business transactions using options. As well as taking them public on a recognized stock exchange. He has been featured in Smart Investor Magazine with a 4-page story.

Disclaimer: This material provided in this article should be used for informational purposes only and in no way should be relied upon for legal or financial advice. Also, note that such material is not updated regularly and some of the information may not, therefore, be current. Please be sure to consult your own financial advisor and lawyer when making decisions regarding your financial or legal management.?

#business?#lamarsidwell?#igftou?#ameralamer?#ftx?#sbf?#sambankmanfried?#crypto?#cryptocurrency?#cryptotrading?#cryptoassets?#cryptoregulation