Dear CIGAs,
Have you protected yourself? If not why not?
Let us review the means and ways to achieve this. Can you afford to lose everything?
A few notes:
A Transfer Agent is a bookkeeper for the company. Of course they have no insurance because there is nothing to insure. Even if they are owned by a financial there simply is no money held there, nor are your certificates. All that is there is a computer with your name on it.
“Direct Registration” is another term for “Book Entry.”
Go back to your broker, no matter how you got there, and be sure that what I have advised you in fact has occurred. No exception at all!
If you have any problems contact the company in question, going as high up the chain of command as you have to go to get attention. Contact the CEO and Chairman if required.
Take no back talk from any broker. The majority of them are clueless. What you read here is FACT not up for discussion. Please review the following:
Posted On: Wednesday, July 09, 2008, 3:58:00 PM EST
Becoming A Book Entry On The Books Of The Transfer Agent
Author: Jim Sinclair
Dear CIGAs,
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:
http://www.investordictionary.com
http://www.investopedia.com
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.
Note:
Retirement accounts:
There is one more alternative that may help the retirement account holder, but will certainly protect the investor who is concerned over the financial health of your financial agent holding your investments.
Monty Guild wrote the following excerpt in early April of this year:
"REMINDER--HAVE YOU CHECKED THE SAFETY OF YOUR CUSTODIAN? HAVE YOU CAREFULLY READ THE LANGUAGE OF YOUR CUSTODIAN'S AGREEMENT WHICH GOVERNS THE DISPOSITION OF YOUR ASSETS IN THE CASE OF SERIOUS FINANCIAL PROBLEMS IN THE WORLD ECONOMY, OR WITH THE CUSTODIAN ITSELF?
In our opinion, all investors and all recipients of pension plans or holders of IRAs should check the financial stability of the custodians of the assets that they own. Equally important, is the legal wording of your relationship with your custodian. Have your attorney look over the wording and make sure that the custodian is segregating your assets and will audit your assets annually to make sure that they are segregated from other clients and from the assets of the firm itself.
We have spent money on attorneys who review the legal language in our custodial agreements, as we believe that it is essential knowledge. We are money managers, not attorneys. Please have an attorney look over the legal language of your relationship with your custodian...what you find may surprise you."
Jim Sinclair’s Commentary
I have personally used:
Marcus Law Offices
2094 185th Street
Suite 15
Fairfield, Iowa 52556
641-472-5945
641-472-5404 fax
I have no direct or indirect financial relationship with this firm or anyone associated with it in any way.
Info on getting IRA Accounts Certificated:
Posted On: Monday, July 14, 2008, 9:33:00 PM EST
Receiving Share Certificates For Stocks In An IRA Without Being Penalized
Author: Jim Sinclair
Dear Jim,
The message below was posted last night on the CometGold Forum at http://www.ContraryInvestorsCafe.com .
It gives instructions on how to certificate shares in an IRA account. The only kicker is that the certificates themselves must be held in the safe at your broker, but it creates true custodialship and helps fight the shorts.
Best regards,
CIGA Tom
Here is what I have done for ABC shares I own in an IRA:
I am using Charles Schwab. For all my ABC Inc. shares I requested a stock certificate in the name of Charles Schwab, for the benefit of "My Name". Then I instructed them to hold the stock certificate in safekeeping (their safe). They charge me $50/year per certificate for this service.
Once CS told me it was taken care of. I called the Corporate Secretary at the company in question and she confirmed that my ABC certificate number showed up on the company records. She also confirmed the way the certificate read and the number of shares.
I did not request it, but the transfer agent also sent me a notice that a certificate was issued as well.
I can tell you when I made the request of CS earlier this year their first response was that they could not do this for shares in an IRA. I told them that it was in fact possible, correct and legal as advised by my counsel. It took some time but they were able to get it done.
Jim Sinclair’s Commentary
Method #2 in the example given above is to request direct registration book entry naming the trust entity and the IRA account.
That affords protection in a financial way, as does a two-signature checking account. It is satisfactory.
As the quote above infers, forget about returns on money and focus on Getting Your Money Returned.
In the final analysis GOLD is the only Honest Money and Gold is the Money of the People, certainly not dollars.
Power to gold and to the people!
