Affiliates

 SEC v. Kern, 425 F.2d 143 (2nd Cir. 2005) holds that, even if it otherwise can be sold under Rule 144, the stock held by minority shareholders of a shell is restricted because those minority shareholders are under the “common control” of the promoters of the shell (page 149 and page 150) . The Court was amalgamating the minority stock in that shell with the control stock because the SEC rules amalgamate stock under common control. The Court said “Indeed, this transaction – attempting to garner large quantities of closely held companies' stock in anticipation of a public distribution – is exactly the type of transaction for which the Act was intended to require disclosure.”