Form three is an S-3 filing, isn't it?
No, Form 3 is an Initial Filing of Equity Securities, that a corporate insider files at an IPO or when he/she joins the company or becomes an insider. It states how many shares and derivatives he/she owns directly or beneficially, and the terms of the derivatives.
An S-3 is a registration statement, often used (in this context) for a follow-on offering or to register insider shares, or both. In order for an insider to sell shares, either the shares must be registered, or they must qualify for sale under Rule 144 (a special rule that lets insiders sell unregistered stock under certain limited circumstances). Typically true insiders don't sell under Rule 144, they register the stock, so the S-3 basically signals a likely intention to sell, always in advance of and often well in advance of the actual sale.
In either case, the insider must file Form 4, which is the "revision" version of Form 3, to reflect the sales and to restate their new position. If Rule 144 is used, there is a separate filing covering the intention to sell. However, Forms 3/4/5 need not be filed until (I believe) the 10th of the month following the sale, and 144's take their sweet time because they go through the retail brokerage system in paper form before getting to the SEC.
My only point in defending the current system is that it seems to work pretty well most of the time. As to your argument that you shouldn't have to pay twice, frankly I agree - it's just not something that really ever bothered me.
Regards,
Fund |
