Securities Opinion Letters

As a Securities Lawyer, Matt Stout, drafts many types of securities law opinion letters on behalf of OTC public companies and shareholders of Bulletin Board and Pink Sheet issuers.

Rule 144 Opinion Letters

Matheau J. W. Stout has researched and drafted many legal opinions for shareholders who wish to clear restricted stock under Rule 144.

The process is straightforward:  securities attorneys drafting legal opinions under SEC Rule 144 review an issuer’s SEC filings, review documents provided by management and shareholders and issue an opinion on whether the elements of Rule 144 have been met.

When the requirements of SEC Rule 144 for clearing restricted stock have been met, securities lawyers at the Law Office of Matheau J. W. Stout, Esq. issue detailed opinions to the issuer’s transfer agent, which discuss the origin of the shares in question, as well as the affiliate status of the shareholder and all prior holders of the shares.

4(a)(1) Legal Opinions When Rule 144 Does Not Apply

When issuers are not current in their filings and are former shells, Rule 144 does not apply to clearing restricted stock because the “current public information” requirement is not met.

When shareholders have held onto their stock for at least two years, it is often possible for a securities attorney like Matt Stout to research and issue a 4(a)(1) opinion, which discusses the shareholder’s extended holding period, his non affiliate status, and most importantly, the fact that the shareholder is not an underwriter or dealer.

Section 4(a)(1) legal opinions are also known as 4(1) opinions.  These require detailed documentation, but when the documents exist, and the requirements are demonstrated, Matheau J. W. Stout, has had success with removing the restrictive legends from restricted stock even when an issuer is uncooperative or hostile.

DTC Opinion Letters

When a OTC issuer undergoes a reverse split, a new CUSIP is issued, and this requires a securities attorney’s opinion letter addressed to the Depository Trust & Clearing Corporation (“DTC”).

Because an issuer’s usual securities counsel is not allowed to draft this opinion, the public company must hire counsel for this specific purpose.  In those instances, Matt Stout receives referrals from other securities attorneys for DTC opinion letters and he will review the circumstances under which the new shares originated, and provide DTC with the legal opinion necessary for the stock to trade.