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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today -- Ignore unavailable to you. Want to Upgrade?

To: James Harold Alton who wrote (7450)	8/3/1998 8:41:00 AM
From: Dean Dumont	Read Replies (6) \| Respond to of 19331

Good Morning James, restricted shares if sold in a private transaction not only retain their restriction but the legend is extended one year for the person purchasing the restricted stock. There are ways around that, but they are very very risky. As for legend stock being sold into the open market place, NO you cannot sell the shares and have the transfer agent hold them until they clear. Paper MUST be delivered to the purchaser free of any liens or encumberences and since DCTC is not marginable the seller has encumbered the shares. If they are sold in the open market they must be returned by the transfer agent to the seller and his agent. Restricted shares are also required to be registered as restricted and issued as the same, restricted. The only way they can be transfered is to a like account, but in certificate form. DTC can not and will not electronically transfer legend securities. They have to be registered and shown that they are paid for and a few other details. So inclosing, No you cannot sell, LEGALLY, sell restricted shares and transfer them as though they are free trading common shares. There must be an opinion letter attached to them when the transfer agent receives them. Th transfer agent must then look through its legend book and see the date of the stock being issued, then check the legality of the opinion letter. When I talked to the NASD on Wednesday, they gave me information that I am going to be using and I do not think our transfer agent will be to happy with me. Speceficially over the matter of lifting the legend of shares illegaly sold, with an opinion letter that will cause an investigation by the NASD and the S.E.C. This ball is already rolling.