December 28, 2007
In the first full paragraph on pg. 71558 in the Federal Registrar it states that "...both restricted securities and unrestricted securities will be subject to the same one-year waiting period...." The term unrestricted securities is not defined and it is very confusing. Do unrestricted securities apply to 144k stock? Does it apply to public float? Does it apply to securities registered under the Exchange Act? It does not seem to serve the public interest or to be fair to holders of unrestricted securities that have been purchased in the open market.
Pg. 77115 of the Federal Registrar discusses the worm letter issued to the NASD Regulation, Inc. on January 21, 2000. The worm letter was never intended to cover operating companies that were never a blank check company and later became a shell company. Now the staff appears to be preventing sales of 144 securities in the foregoing situation since under the proposed rule, a company that is, or was, a reporting or a non-reporting shell company ... would not be able to rely on rule 144 to sell the securities. I believe that the commission should not prevent 144 sales by holders of securities in a company that was an operating company which was never a blank check company and then became a shell company. In these situations, either the new rules should not apply to them or the form 10 information that needs to be publicly available should not have to be publicly available for such a lengthy period of time of one year. Further, in this situation, the staff should not prohibit the sale or transfer of unrestricted securities which are now part of the public float prior to the effective date of the release or, in my opinion, ever.