Stock Legends and Restricted Securities

What this video covers

• Why a stock legend limits negotiability and must be addressed before unrestricted resale or delivery, even if the certificate is genuine and properly assigned
• The three-step procedural flow: restrictive legend on certificate, then restriction must be addressed, then unrestricted resale or delivery can proceed
• How to identify restricted securities: securities acquired directly or indirectly from an issuer or affiliate in a transaction or chain of transactions not involving any public offering
• How to identify control securities: held by an affiliate of the issuer, regardless of how the affiliate acquired them
• Why restricted and control securities are not the same category, and how one single security can be both at the same time
• The purpose of the resale safe harbor for restricted and control securities: so the seller is not deemed an underwriter
• The exam trap of implying a certificate can be delivered solely because it is genuine and properly assigned, ignoring the legend