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Rule 144 and Form 4

06/20/2025
As an investor if you receive information about the Form 4 and Form 144 EDGAR filing by the company affiliates/insiders it is important to take a look at that report. It gives you the information about the percentage of shares sold and the related change in the ownership of the affiliates. In some cases where the company fundamentals are not strong it could be a sign of caution.

Affiliates
  • Officer, director, or 10% shareholder of publicly listed company or private company
  • Security sales by Affliate is subject to volume limitations
  • Volume limitation is an attempt to prevent investors of being defrauded by the Affiliate

Rule 144
  • Rule covering restricted and control stock

Restricted stock
  • Stock not registered with the SEC
  • Subject to a 6 month holding period for non-affiliate investor
  • Subject to 6 month holding period and volume limitations for Affiliate Investors

Control stock
  • The stock owned by an affiliate (any officer, director, or 10% shareholder) is called control stock holder. It can be publicly listed stock or a restricted stock.
  • Subject to volume limitations (They are allowed to sell the greater of 1% of the outstanding shares or the four-week trading average, four times a year. This volume limitation rule prevents affiliates from selling significant amounts of shares in short periods of time.)
Rule 144 Table

Form 144
  • Filed if control or restricted stock intended to be traded in the next 90 days
  • Only must be filed if more than
    • 5,000 shares, or
    • $50,000 total value sold

Form 4
  • Filed if an affiliate trades control stock
  • Must be filed within 2 business days of trade

EDGAR
  • Electronic filing system for SEC forms
  • SEC oversees the filing process and maintains EDGAR
  • Form 144 and Form 4 are filed on this system

Qualified Institutional Buyer (QIB)
  • $100 million or more of investable assets

Rule 144A
  • If sale of control or restricted stocks occur with the QIBs, QIBs are not subject to rule 144 (they do not have to file Rule 144 Form)
  • QIBs avoid holding periods and volume limitations