Sec
Under Rule 144A, an issuer of restricted stock is permitted to sell to which investors?
Rule 144A = QIBs (institutions with $100M+ in securities). Rule 144 = general public after holding period.
Complete Analysis & Legal Rationale
Rule 144A provides a safe harbor exemption from registration for sales of restricted securities to Qualified Institutional Buyers (QIBs). A QIB is typically an institution that owns and invests at least $100 million in securities.
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:
Financial institutions must meet the QIB threshold to qualify.
Accredited investors have different criteria and are covered under Regulation D, not Rule 144A.
Matches the verified teaching point in the explanation.
Rule 144A specifically requires buyers to be QIBs, not just previous purchasers of restricted stock.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.