Curried Wealth Building
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Protecting Your Shares
Issue 14  -  October 12, 2008

I haven't written anything in the last few days as I have been studying various sites and topics to make sure the strategy employed is sound. There is a large discrepancy around the sites as to what will happen in the next few weeks. Some are leaning towards a rebound in the stock market in general while others see continued weakness. I can't really make a good recommendation at this time as there is a lot of uncertainty. I did buy more Yamana Gold (AUY) on Friday as it continued to get pummeled. I don't see how that stock is not higher in a year. I will be posting a review of my findings either Monday or Tuesday.

For now, I wanted to give you the way to protect your stock. This only applies to stock outside of retirement accounts. There is more about that at the referenced web site. I have copied this out of jsminesetand they are very reliable:

"To start, here are several definitions you should familiarize yourself with:

Transfer Agent:
The record keeper employed by a public corporation to prepare and maintain records related to the accounts of their shareholders. Such information would include the name of each registered shareholder, his or her address and the number of shares owned. The agent oversees the issuance of certificates to new shareholders and the destruction of certificates that have been sold.

It does not matter if a transfer agent is owned by a bank or financial entity because it is a separately incorporated non-financial entity posing no financial risk to those it accounts.

Street Name:
A term used for describing a stock that is held in the name of a brokerage firm, instead of the actual purchaser of the stock. When you buy a stock and let your brokerage firm hold the stock certificate on your behalf, the stock is said to be held in “street name.”

Nominee name:
An official of a financial institution or some other appointed agent to whom securities or other funds are transferred by agreement with the actual owner. Nominees facilitate the collection and distribution of income from securities (when such securities are held in the name of a nominee), and facilitate the sale or purchase of securities when it may be inconvenient or impractical to obtain the necessary signature of the principal in order to conduct a transaction.

For additional definitions visit:

There are three primary forms to represent share ownership:

Ownership via your account at a broker or bank in which the broker or bank holds all the shares for all clients in that share in what is called a street name. Street names today are a nominee name such as CEDE. The broker or bank then shows your ownership of this security in your monthly statement in your cash or margin account. Your shares will remain in the nominee account under the nominee name of the bank or broker in the form of a computer entry.

Ownership via paper certificate whereby an entity called a Transfer Agent has been informed by your broker of your coordinates and request for the delivery of a paper certificate. The Transfer Agent follows the instructions of your broker and sends the paper certificate with your name on it to either you directly or to your broker who most often then sends it to you. The process reduces the street name position by the amount of your position. Your ownership drops off your brokerage or bank statement. Yes it is that easy.

Ownership via the form of book entry on the books of the transfer agent: Instruct your bank or broker that you wish your shares to be in the form of a book entry at the transfer agent. Your broker then instructs the Transfer Agent of your request, giving them all your information. The transfer agent reduces the street name position by the amount of your holdings and puts your name in their books as a book entry. You now fall off the books and records of the bank or broker.

If you prefer method 2 or 3, all that is required is for you to instruct your broker or bank of your wishes.

If their eyes glass over in a blank stare or they say “WHAT?” you do the following:

Call the company you are a shareholder of and ask the name and coordinates of their transfer agent. If they say they have none and are totally automated you are out of luck. This is rare but growing.

You call the transfer agent telling them of your broker’s rank ignorance. Ask them how to instruct the broker so that your needs are met and met promptly. Call your ignorant broker or bank back and tell them you spoke to Mr./Ms. Whomever at the transfer agent and you wish them to inform Mr./Mrs. Whomever of your wishes."

It's not very hard and should make it painless to confirm your claim on shares should the system shut down for some reason. This will hopefully be a wasted effort but should the worst happen, you will be extremely glad that you did. Remember if the shares have been lent out to short it may be difficult to get them back. The system is rife with nonsensical shuffling around of paper and obligations. The above states that you do NOT have to take your certificates. If you do take possession of them it is your responsibility to protect them, so keep that in mind.