Lockup agreements prohibit company insiders from selling their shares for a specific period of time. This causes the shares to be "locked up." Before a company makes its initial public offering, the company and its backer typically sign a lockup agreement to guarantee that shares owned by these insiders aren't offered too soon after the initial public offering.
The terms vary, but the standard agreement usually contains a "no-sell clause" for the first 180 days. These agreements can limit other things such as the number of shares an insider can sell over a specified amount of time. The terms are generally determined by the backer or underwriter.
Some states do require companies to have them. Federal law requires only that if such agreements exist within the company, that the terms should be disclosed in the company's registration documents.
You can find out if a company has a lockup agreement by contacting the company's shareholder relations department for a copy of the prospectus or by asking your broker. If the company has filed its prospectus electronically, the SEC's database is a useful resource as well.
If you face allegations that you have violated an antitrust statute, immediate legal counsel should be sought. Violations of U.S. antitrust law are serious offenses carrying both civil and criminal penalties. Speaking with the proper lawyer will inform you of your legal rights as well preserve any possible remedies you may have. If you believe another business violated the antitrust acts and harmed you or your company, you should speak to a lawyer who can properly review your case.
Last Modified: 11-07-2011 04:25 PM PSTLaw Library Disclaimer
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