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Official Practice ProblemFINRA Series 7 Blueprint: Function 2
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Question #s7-prep-s7-q-146Function 2Moderate

Sec

An executive who holds restricted securities must file which form with the SEC before selling shares under Rule 144?

Correct Choice: B

Rule 144 sales require Form 144 if selling >5,000 shares or >$50,000 in 90 days.

Complete Analysis & Legal Rationale

Form 144 is filed with the SEC to provide notice of the proposed sale of restricted or control securities under Rule 144. This form must be filed if the sale exceeds 5,000 shares or $50,000 in any three-month period.

Distractor Autopsy (Why Other Options Are Traps)

FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:

Choice AIncorrect
Concept Trap

Form 4 reports changes in beneficial ownership by insiders but is not specifically for Rule 144 sales.

Choice BCorrect
None

Matches the verified teaching point in the explanation.

Choice CIncorrect
Concept Trap

Form 10-K is an annual report filed by public companies.

Choice DIncorrect
Concept Trap

Form S-1 is a registration statement for new securities offerings.

Authorities & References:

Official Standard: Primary offering registration/prospectus framework and exemptions (verify current text).

Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.

🏛️

Regulatory Authority & Citations: Primary Legal Sources

Verified citations governing Question #s7-prep-s7-q-146 (FINRA Series 7 Content Outline)

To pass the FINRA Series 7, candidates must understand not just the calculation formulas, but the exact federal securities acts, SRO rulebooks, and statutory frameworks that enforce them. Review the primary authority records below:

SECSecurities Act of 1933— Securities Act of 1933

Primary offering registration/prospectus framework and exemptions (verify current text).

Read SEC Official Rule
FINRAFINRA Series 7 Content Outline— General Securities Representative Examination (Series 7) Content Outline

Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.

Read FINRA Official Rule

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