Securities Law

Securities Law

I provide Securities Act Rule 4(a)(1) and Rule 144 opinion letters to qualified shareholders who need one to remove restrictive legends from restricted stock so they can prepare to sell it on the open market.  I also represent stock transfer agents who are sued and need defense counsel.

Who Qualifies

Typically, the vast majority of the cases I see involve stock: (a) issued by a company that is not a shell company, subject to the Securities Act, and current in its reporting to the SEC, (b) issued to a shareholder who is not an affiliate of the company, and (c) held by the shareholder for six months or more.  If you have held the stock for a year or more, a different subsection/exemption may apply to you.  Call or write to me to discuss this.

How Fast

I turn around the opinion letters pretty quick, but the turn around time for a particular letter varies depending on: (a) how quickly the shareholder gets me the information and documentation I need to do the investigation; (b) how many reports the issuing company filed with the SEC and/or OTC Markets and how long they are; (c) whether or not I have a hard appointment that day/week (i.e. hearing, deposition, mediation, or trial); and (d) the method and speed of payment.  Usually, I can turn around a letter in 3-4 days-especially if the shareholder is organized, prepared,and responsive.

What I need

First, I need the full legal name of the issuer-the company that issued the stock.

Second, I need the document(s) that reflects how, when, and why the stock was issued to you.  This is usually a Subscription Agreement (aka the purchase agreement).  However, if you acquired the stock some other way (i.e., work for stock, loan, gift, etc.), then you may have a different kind of agreement (i.e., Independent Contractor Agreement, Promissory Note/Loan Agreement, Gift Form, etc.).  Regardless, I just need the applicable agreement or document-preferably one that is fully dated and fully executed. If you don’t have one, it’s OK. We can just ask the issuer or its agent for copies.

Third, I need the date you purchased the stock, acquired it, or the date it was gifted to you.  Usually, this is the date that you made payment to the issuer (date of the check, date of the wire, etc.).  Most often, the payment occurs after the date the applicable agreement was signed.  Also, some of the stock transfer agents (STAs) are requiring proof of purchase.

Fourth, if you hold the shares in book entry form, I also need a copy of your account statement with all applicable transaction dates.  If you don’t have one, just ask the stock transfer agent (STA) for a copy.  This document will reflect the date the stock was actually deposited into your account and usually follows the date of the agreement and the date the monies were paid.  If you hold the shares in physical certificate form, I just need a copy of the certificate(s).

Finally, I need written confirmation that you are NOT an affiliate of the company.  An affiliate or insider is a director, an officer, and/or a preferred voting stockholder.  And if you are or were an employee of the company, I’ll need your title, position, and start and end dates.  Confirmation can be made via email.

What it Costs

I charge a flat rate of $250 for a standard rule 144 opinion letter, and 99% of the projects are standard.  However, if the project requires significantly more time than the typical project, I reserve the right to charge more.  If the time required is significantly more than I would spend on a standard letter, and if the cost exceeds $250, we’ll have a discussion about it first, and we will reach an agreement as to price before the work continues, before the letter is issued, and before the bill is due.  You will always know how much the project will cost before the work is completed and the bill is due.  Again, it is almost always the $250 flat rate.

Rule 144 Generally

Rule 144 is the most common exemption that allows the resale of unregistered securities in the public stock market, which is otherwise illegal in the U.S. The regulation gives a specific set of conditions that a shareholder must meet in order to sell unregistered, “restricted,” or “controlled” securities in the public marketplace.

For a shareholder to sell securities (such as stock, bonds, equities) on the public stock market, the securities and sale need to be registered with the U.S. Securities and Exchange Commission (SEC). Securities that are not registered or that are labeled as “restricted” or “controlled” generally cannot be sold or resold on the public market. However, there are several exemptions for the resale of restricted securities, and Rule 144 is the most commonly used exemption; however, Rule 4(a)(1) may apply too.

Litigation Defense

If you are a stock transfer agent and you are the defendant in a Florida lawsuit, I can help.  Whether you need lead counsel or local counsel to assist your out-of-Florida lead counsel, I can help.  And if you have been issued a subpoena for records or deposition and you need assistance with the response/appearance, I can help. I’ve represented a stock transfer agent in Florida since 2014.  I am intimately familiar with the role of a stock transfer agent and the law as it applies to stock transfer agents.

Let’s Connect

Call or write me, and we’ll determine whether you qualify for an exemption, and if so, which one.

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