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Rule 144 provides an exemption and permits the public resale of restricted or control securities if a number of conditions are met, including how long the securities are held, the way in which they are sold, and the amount that can be sold at any one time.
Form 144 must be filed with the SEC by an affiliate as a notice of the proposed sale of securities when the amount to be sold under Rule 144 during any three-month period exceeds 5,000 shares or units or has an aggregate sales price in excess of $50,000.
The following individuals or entities must file Form 144 if selling restricted or control securities: Corporate insiders (similar to Section 16 insiders) subject to the reporting requirements of section 13 or 15(d) of the Exchange Act, which includes: Directors. Officers.
Form 144 is a mandatory SEC filing for those intending to sell restricted or control securities. Restricted securities stem from private sales, whereas control securities belong to affiliates such as directors or large shareholders.
Form 144 filings indicate insider selling and therefore can trigger a bearish reaction in the underlying stock.