A private charitable foundation may be able to sell, under Rule 144(k), stock donated by an affiliate of the issuer who is also a trustee of the foundation

Article Abstract:

Securities and Exchange Commission (SEC) interpretive letters appear to have established that charitable foundations can sell restricted stock contributed to the foundation and take advantage of SEC Rule 144(k) if the donor and the foundation are not affiliated. Under Rule 144, parties affiliated with the issuer of the restricted securities cannot use Rule 144(k). The determination of whether the foundation and the donor are affiliated will be based on the exempt status of the private foundation, the presence of self-dealing or the existence of reversionary interests.

Stocks, Investments, Donations, Charitable foundations

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Two recurring situations in which a short sale against the box of non-affiliate restricted stock is not permitted

Article Abstract:

SEC Rule 144(a)(3) restricts the ability to sell certain shares because they are not covered for public resale by an effective form nor have they met the one-year holding period. One strategy for avoiding such risk is the short sale of a number of shares equal to or some percentage of the number of restricted shares the shareholder is holding. Shareholders can avoid restrictions on short selling through a two-step procedure.

United States, Interpretation and construction, Securities law

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Some comments on when a trust may be deemed an "affiliate" for Rule 144 purposes

Article Abstract:

The SEC's interpretative letters in the Jessie M. Brill, Hadlick Hoedman and Whitney Holding cases address the issues surrounding the applicability of the Rule 144 affiliate definition to trusts. Aggregate volume requirements for trusts under Rule 144 are also discussed.

Laws, regulations and rules, Affiliated corporations, Trusts and trustees, Trustees, Trusts (Law)

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