Final answer:
The statement 'If a client is selling shares pursuant to rule 144, a filing must be made to the SEC' is false. A filing is required only if certain conditions are met, specifically if the sale exceeds certain thresholds in shares or dollar amount.
Step-by-step explanation:
If a client is selling shares pursuant to rule 144, a filing must be made to the SEC. The statement is false. Rule 144 is a regulation enforced by the U.S. Securities and Exchange Commission (SEC) that sets the conditions under which restricted, unregistered, and control securities can be sold or offered for public sale without a registered offering. Essentially, Rule 144 provides an exemption from the registration requirements of the Securities Act of 1933 for the public resale of restricted and control securities if a number of conditions are met.
One of the key conditions for the use of Rule 144 is that, after a certain holding period, the seller may be required to file a notice with the SEC if the sale involves more than 5,000 shares or the aggregate dollar amount is greater than $50,000 in any three-month period. However, for smaller sells that do not exceed those thresholds, no filing is required, hence the statement that a filing must be made in every instance when selling shares pursuant to Rule 144 is not accurate. Since being established by the Federal Securities Act and expanded upon by subsequent legislation, the SEC has played a crucial role in regulating the investment industry, ensuring transparency and fairness in the market.