Insider Affiliate in a Public Company

Welcome to our latest video where we shed light on one of the most crucial terms in the Securities Exchange Act of 1933 - the 'affiliate'. We take you through the intricate details of affiliate roles as per SEC Rule 144 and Regulation D for an enhanced comprehension and understanding.
The term 'affiliate' according to SEC Rule 405 refers to an individual or an insider with a controlling relationship. Examples of affiliates can be a corporate officer or a shareholder who owns 10% or more of the company's stock and has an influence on the company's management.
Case studies such as Wolfson Gregory W. Gray help us understand that the interpretation of 'control' can vary on a case-by-case basis. Misrepresentation of affiliations can lead to legal ramifications.
While a 10% ownership is a hallmark of control, the individual circumstances are also a significant factor. Cases like Penaluna and Co v. SEC have broadened the definition of affiliates, thereby emphasizing the role of controlling shareholders.
In accordance with the Securities Exchange Act, securities that are issued to affiliates are required to have the right legends. We advise you to consult with a legal counsel in case of any queries.
Thank you for tuning in!
#SecuritiesExchangeAct, #AffiliateRoles, #corporategovernance
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