Are your stock, bond and security certificates secure?

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John99's picture
John99
Status: Gold Member (Offline)
Joined: Aug 27 2009
Posts: 490
Are your stock, bond and security certificates secure?

When I got into the investment business some 3.2 million years ago, I learned that new brokers were given the "salesman of the day" jobs. This was mostly fielding telephone calls from the general public, and I quickly discovered that the majority of calls were from people who said something like, "grandma has just died and we opened her safety deposit box and found a bunch of old stock certificates. Can you check if these things are worth anything?"

And as a hungry broker, you would go through the hassle of tracking down these 'certs' in hopes of finding a million shares of Exxon. Then, we were told over the subsequent years to push clients into holding their stocks in the broker's account in 'street name', so they could be sold easily, and have dividends collected properly, and make adjustments for warrants and/or rights issues, and on and on and on. The nail in the coffin that pushed people into leaving their securities in their broker's name, was the addition of fees to search for and replace old certificates.

Well, now I read an interesting article, "The Unknown Illuminati Bank", or some such title that caught my eye (smacking of bankster world domination :-) and I dove in. What it told was a pretty amazing tale of a transition (that I mentioned above) from holding client shares at the brokerage house in 'street name'  to now, a central clearing institution called, DTCC, (The Depository Trust and Clearing Corporation). Ever hear of them? Me neither. It is likely the biggest financial institution we have never heard of seeing as their website boasts they hold $34 Trillion in securities, and in 2009 settled $1.48 quadrillion in securities transactions! Here's a statement from their sleepy little website:

DTCC, through its subsidiaries, provides clearing, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks.,,DTCC's depository provides custody and asset servicing for 3.6 million securities issues from the United States and 121 other countries and territories, valued at almost $34 trillion. In 2009, DTCC settled more than $1.48 quadrillion in securities transactions.

Wow! That means that virtually all securities traded on the stock markets are legally owned by this corporation (in trust for us, of course). The article I read went to say that DTCC is owned by the same banksters who own the Fed, and pretty right again. Here's how wikipedia describes the ownership:

User-owned [1] and directed, it automates, centralizes, standardizes, and streamlines processes that are critical to the safety and soundness of the world’s capital markets. Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal bonds, unit investment trusts, government and mortgage-backed securities, money market instruments, and over-the-counter derivatives. DTCC is also a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's Depository Trust Company (DTC) provides custody and asset servicing for 3.5 million securities issues, mostly stocks and bonds, from the United States and 110 other countries and territories, valued at $40 trillion, more than any other depository in the world.

In 2007, DTCC settled the vast majority of securities transactions in the United States, more than $1.86 quadrillion in value. DTCC has operating facilities in New York City, and at multiple locations in and outside the U.S. (Link)

User-owned?? I tried other searches but could not get a list of owners but the implication is that the major players like our friends at Gold-in-Sacks and JP Moron are right in there. I was impressed with the homework this guy had done, and he left us with a very valid point and area of concern for anyone holding securities at any of the brokerage firms or banks (IMHO):

"The problem with that is that it appears that Cede isn't just some dummy name, but an actual corporation that DTCC controls. And, well, if you ask anybody about this, who actually knows about it, they will naturally tell you that it is all a formality. To serve you better, of course. And, well, maybe it is. DTCC seems like a nice and friendly company. It is a private company, owned by the same people (major U.S. banks) who own the Federal Reserve Bank. And if they all stick to their job, and just keep the money and your stocks flowing smoothly, I'm sure that is all well and good. But if somebody at some point should decide otherwise, and there's a national U.S. emergency and/or the U.S. government becomes unable to pay its debts, well, they might just not give you your stocks back. Because legally they own them. Something to think about.

Full article

Maybe it's time to go back to Grandma's era and get your stock, bond and securities registered into your name and hold them along with you gold and silver?

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1443
Re: Are your stock, bond and security certificates secure?

John!  Welcome Back!

On anther note:  Where's the link to this article?  Can't find it.  I'd like to examine it a bit more if possible. 

 

Thanks!

John99's picture
John99
Status: Gold Member (Offline)
Joined: Aug 27 2009
Posts: 490
Re: Are your stock, bond and security certificates secure?

Hello LR!!! Good to be back!

Well I am getting old as I lost the original Illuminati link, but within that article was the link to the more factual article that I link to above (http://ming.tv/flemming2.php/__show_article/_a000010-000923.htm)

ao's picture
ao
Status: Diamond Member (Offline)
Joined: Feb 4 2009
Posts: 2220
Re: Are your stock, bond and security certificates secure?

Yep, interesting stuff.  I posted about this about two years ago.

http://www.peakprosperity.com/forum/who-really-owns-your-stocks-hint-its-not-you/23299

SteveW's picture
SteveW
Status: Gold Member (Offline)
Joined: Jan 21 2010
Posts: 490
Re: Are your stock, bond and security certificates secure?
ao wrote:

Yep, interesting stuff.  I posted about this about two years ago.

http://www.peakprosperity.com/forum/who-really-owns-your-stocks-hint-its-not-you/23299

I reviewed this as well and think this issue is overblown. While the DTCC might legally own the stock in trust you will remain the beneficial owner which defines the voting rights and the right to dispose of the stock. While your stock may be loaned for shorting you can still vote it.

I wouldn't worry about government seizing stock, if they wanted to do that they could simply shut down the markets and make any stock in certificate form unusable. A certificate itself has no intrinsic value since it is really a derivative of an entry on the companies books. Its number needs to correspond with the bookeeping entry which subverts counterfeiting. The DTCC limits counterfeiting since your certicate cannot be seen by some underhanded acquaintance who could copy the certificate and number and present it for sale, an easy task these days with colour lasers.

John99's picture
John99
Status: Gold Member (Offline)
Joined: Aug 27 2009
Posts: 490
Re: Are your stock, bond and security certificates secure?

ao, thanks for bring that to our attention - I enjoyed the read and the comments, especially from some old CM members currently MIA.

Maybe, in the end, we will learn (the hard way) why our elders kept cert's in their own names and didn't trust the banks.

Thank goodness for PM's

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