Options:
I because these securities are not registered with the SEC, such an offering would be illegal in the United States
II because the securities are not registered with the SEC, they can only be resold in the public markets if the company effects a registered primary distribution and is current in its SEC filings
III public resale of these securities can only occur if the customer holds the securities for 6 months "at risk" and then sells the securities in measured quantities
IV these securities can only be resold by the customer to underwriters that will buy the securities into their inventory and then register them with the SEC
Answer:
II because the securities are not registered with the SEC, they can only be resold in the public markets if the company effects a registered primary distribution and is current in its SEC filings
III public resale of these securities can only occur if the customer holds the securities for 6 months "at risk" and then sells the securities in measured quantities
Explanation:
Option I is wrong because this type of operations is completely legal, and they are called private placements.
Option IV is also wrong because the underwriters do not register the stocks with the SEC, the company must be public in order for it to be registered and their stocks publicly traded.
Option II is correct because you can privately resell the stocks, but the market is very limited.
Option III is correct because if the company does turn public, then the investor must hold the stocks for 6 months "at risk" (no puts purchased) before being able to sell them on public markets.
