LMN Incorporated is listed on the American Stock Exchange. Jane sits on the board of directors for LMN and wishes to buy some LMN stock. She executes a trade on the floor of the AMEX and purchases the shares. How do the provisions of Rule 144 apply to this scenario?

Question

Ariel Blackwell

Business

28 July, 11:30

LMN Incorporated is listed on the American Stock Exchange. Jane sits on the board of directors for LMN and wishes to buy some LMN stock. She executes a trade on the floor of the AMEX and purchases the shares. How do the provisions of Rule 144 apply to this scenario?

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Adelaide Welch · Answer 1

Rule 144 applies to restricted stock and control persons. In this case, Jane is a control person, so the provisions of Rule 144 will apply to her. Here, she is buying fully registered stock off of the exchange. For this reason, there is no holding period on the stock purchased, but restrictions do apply to how much stock Jane can sell in any 90-day period. Therefore the best answer is that Jane is permitted to sell immediately, but she will be subject to the regulations on how much stock can be sold in any 90-day period.

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