Form 144

What Is Form 144?

Form 144 is a notice that certain people must file with the U.S. Securities and Exchange Commission (SEC) before selling a significant amount of stock in a company they are closely tied to. It is filed by affiliates of a company, such as executives, directors, and large shareholders, when they want to sell restricted securities or other control securities under Rule 144. The form tells the SEC and the public the number of shares to be sold, the approximate sale date, the broker handling the sale, and how the shares were originally acquired.

How It Works

The notice is filed electronically through the SEC's EDGAR system at the time the seller places the sell order. It is required only when the sale exceeds certain volume thresholds within a three-month period. Form 144 is a notice of intent, not a report of a completed trade. When the sale actually happens, the insider typically reports it on Form 4, which is due within two business days. The notice does not approve or guarantee the sale. The seller must still meet the other conditions of Rule 144, such as the holding period and volume limits.

Why It Matters to Investors

Form 144 filings are public, so investors can see when insiders plan to sell. Some investors watch these filings as one piece of information about insider activity. A sale can happen for many reasons unrelated to a company's prospects, such as diversification, taxes, or personal financial needs. Filing a Form 144 does not mean the sale will be completed, and the seller may not go through with it. Investors often read these filings alongside company disclosures and the rules governing insider trading to get a fuller picture.