The Securities and Exchange Commission voted unanimously to allow investors owning securities purchased through a private placement to resell those securities in the public market after waiting one year, instead of the currently mandated two years. The rule change should allow companies making the nonpublic offerings to sell the securities at smaller discounts because the risk to investors will be decreased by the shorter holding period, according to the agency. SEC Chairman Arthur Levitt said this change will benefit small businesses in particular. The new rules will take effect in about 60 days. In a separate action, the SEC accused Long Island, N.Y., brokerage firm Sterling Foster & Co. of charging customers more than double the price of new stock offerings and pocketing $75 million in fraudulent profit. Sterling Foster, without admitting or denying the allegations, consented to refrain from violating antifraud provisions.
SEC to Allow Earlier Stocks Resale
Times Staff and Wire Reports