Restricted Stock and Resale Restrictions

What this video covers

• Why restricted stock is defined by what it is (unregistered shares) while control stock is defined by who holds it (affiliates), and why the restriction follows the person not the security
• The six-month holding period for reporting companies versus the 12-month holding period for non-reporting companies, and why public disclosure drives the difference
• Why control stock acquired in the open market has zero holding period, and how the exam uses this to bait wrong answers
• The volume limitation formula for affiliates: the greater of 1% of outstanding shares or average weekly trading volume over the prior 4 weeks, and why this applies regardless of holding period
• When Form 144 must be filed (5,000 shares or $50,000 in a 3-month period, at the time of the sell order) and why non-affiliates never file it
• The sequential insider reporting forms (Form 3, Form 4, Form 5) and the critical 2-business-day filing deadline for Form 4 that applies to any transaction size
• Why non-affiliates gain total freedom after satisfying the holding period, with no volume limits, no Form 144, and no manner-of-sale restrictions