Study Question of the Week: June 4, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 24, Series 62, Series 79, and Series 82. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 7Series 24Series 62Series 79, and Series 82): 

Under Rule 144, which of the following persons would be subject to holding period limits on a re-sale?

Answers: 

A. A C.E.O who holds 10,000 shares of the publicly traded company he runs

B. A C.E.O who purchased 10,000 shares of restricted securities two years ago of the company that he runs

C. A person who is not an affiliate purchased 10,000 shares in a private placement 1 year ago

D. A person who is not an affiliate purchased 10,000 shares of a company’s stock 2 months ago from an affiliate of the company

Correct Answer: D. A person who is not an affiliate purchased 10,000 shares of a company’s stock 2 months ago from an affiliate of the company

Rationale: If a person purchases shares from an affiliate, the shares are considered restricted, even if they were not restricted in the affiliates’ hands and therefore subject to holding period limits. Holding period limits are 6 months for reporting companies and 1 year for non-reportng companies.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

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