Mutilated Security

DEFINITION of 'Mutilated Security'

A stock or bond certificate on which the owner's details or other identifying information cannot be read. A mutilated security can be the result of damage, negligence, being printed incorrectly or other reasons, and must receive a guarantee of ownership from a third party to ensure there is no fraud.

BREAKING DOWN 'Mutilated Security'

This is simply a certificate that is damaged enough to be unreadable. To avoid fraud, this type of certificate cannot be transferred to the buyer unless a third party makes a legal promise that the certificate is legitimate. The guarantee of ownership comes from a transfer agent, a financial institution that maintains records of investors.

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RELATED FAQS
  1. Is this stock certificate worthless?

    I bought 50,000 shares of restricted common stock from a company in December 2015 and received a stock certificate. I then ... Read Answer >>
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    A stock in my brokerage account has been suspended from trading. Consequently it also has a 'frozen' relationship with its ... Read Answer >>
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