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Replacing Stolen or Lost Securities Certificates

Banks, transfer agents, brokerage firms, and corporations have procedures in place to help investors replace lost or stolen certificates. If your securities certificate is lost, accidentally destroyed, or stolen, you should immediately contact the transfer agent and request that a “stop transfer” be placed against the missing securities. The “stop transfer” helps to prevent someone from transferring ownership from your name to another’s. The transfer agent or broker-dealer will report the certificates missing to the SEC’s lost and stolen securities program.

If you are expecting a certificate through the mail, and it doesn’t arrive, you should immediately contact the organization that arranged the transaction—typically your brokerage firm. While many companies choose to use registered or certified mail to deliver securities certificates to individuals, some prefer regular mail so as not to call attention to the potential value of the item.

You can get a new certificate to replace the missing one. However, before issuing a new certificate, corporations usually require the following:

1. The owner must state all the facts surrounding the loss in an affidavit;
2. The owner must buy an indemnity bond to protect the corporation and the transfer agent against the possibility that the lost certificate may be presented later by an innocent purchaser. The bond usually costs two percent of the current market value of your missing certificates; and
3. The owner must request a new certificate before an innocent purchaser acquires it.

If you later find the missing certificate, you should notify whomever you called to place the “stop transfer” so that the lost or stolen securities report may be removed. Otherwise, you may have difficulty selling the securities.

We recommend that you keep a copy of both sides of your certificates in a place separate from the certificates themselves. If a certificate is lost or stolen and then transferred on the books of the transfer agent to another owner, it may be impossible for you to establish that you owned it because the transfer agent will no longer have a record of your name. But if you have a record of the certificate numbers, the transfer agent should be able to reconstruct transfer timeline and recipient.

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