Scott; If the stock is in street form, with no persons name, and it is quietly stolen from the owner it can be taken to a broker and sold. It retains it's unique number, and can be traced as it moves every time it goes from broker to broker. If the person from whom it was stolen is slack and does not find out about it for years, it can easily keep going for that time and never be found out. However once it is reported as stolen, it's number is placed in a check number data base, and the next time it moves or the broker does an audit it will be caught. Brokers will check all stock into their inventory immediately these days as a precaution against such theft.
If the stock is in named form, and has significant value, the thief can open an account in your name and place the stock therein, and sell it or use it as collateral for the margin value and trade on it's value without selling it. Again once the number is reported it will get caught entering the brokers account, or at audit or trade time.
The other use for named stolen stock is to use it as collateral at a bank for a loan.
To extend the life of stolen stock some mafia thieves would steal the stock, and replace it with double sided color photocopies of the stock. This would fool an audit if the inspector did not pull it out, lok at the watermark, and feel the intaglio pattern of ink expressed oon the paper surface. Often audits do not do more than refer to the files edge and read the number, and it tallies. That fraud can take years, as the stock might not be sold for years, and by then the account that used it as collateral has defaulted, and the bank may heve even recovered on their security, and sold it(it is good stock)
Some of these thievings have taken ten years to find, when an estate lawyer tries to sell the stock for the will, the transfer agent sees it right away.
Some years back a small OTC company was acting as its own transfer agent, and split the stock 2:1, and when the people applied for their stock, gave them their 2 shares for 1. As with many OTC shares there were around 2 million that were never redeemed(sitting in drawers etc)
They then waited, and issued the unclaimed stock to offshore companies, and waited for seven years(in the meantime giving all genuine stock holders their 2:1, as they came in)
They then changed their name. When they were caught the 7 years had eroded the statute of limitaions and they got away with it. This happened in the early 70's, I forget the stock name, perhaps someone on thread can recall it, quite notorious for a while.
I am sure some others will be able to provide some horror stories.
Bill |
