SEC Rule 144

Included within the services that we offer is the preparation of legal opinions under Securities and Exchange Commission (SEC) Rule 144 and Section 4(a)(1) of the Securities Act to facilitate the removal of restrictive transfer legends from restricted securities issued by our clients.

Restricted securities are securities acquired in an unregistered, private sale from the issuing company or from an affiliate of the issuer. They typically bear a "restrictive" legend clearly stating that you may not resell them in the public marketplace unless the sale is exempt from the SEC's registration requirements.

Rule 144 under the Securities Act of 1933 provides the most commonly used exemption for holders to sell restricted securities. To take advantage of this rule, you must meet several conditions, including a six-month or one-year holding period.

Even if you have met all the conditions of Rule 144, you still cannot sell your restricted securities to the public until you have had the legend removed from the certificate. Only a transfer agent can remove a restrictive legend. But the transfer agent will not remove the legend unless the issuer consents — usually in the form of an opinion letter from the issuer's counsel to the transfer agent.

If you want to remove the restrictive legend, you should contact the company that issued the securities — or the transfer agent for the company's securities — to ask about the procedures for removing a legend. If you have a broker, you may want to ask your broker to help you.

If a dispute arises about whether a restrictive legend can be removed, the SEC will not normally intervene. The removal of a legend is a matter solely in the discretion of the issuer. State law, not federal law, covers disputes about the removal of legends.

Our attorneys have substantial experience assisting clients with the removal of restrictive legends from stock certificates via the legal opinions we provide under Rule 144 and Section 4(a)(1). We provide this service for affiliates of issuer companies and their shareholders.

For a consultation with our lawyers, please contact us online or call us at 800-878-5829. We are in the Tampa Bay area of Florida (Seminole) and serve clients throughout Florida, nationwide and abroad.