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.

RELATED TERMS
  1. Transfer Procedures

    The procedure by which ownership of a stock moves from one party ...
  2. Share Certificate

    A share certificate is a written document signed on behalf of ...
  3. Stock Power

    A legal power of attorney form that transfers the ownership of ...
  4. Trust Certificate

    A bond or debt investment, usually in a public corporation, that ...
  5. Periodic Payment Plan Certificate

    A certificate representing ownership interest in a periodic payment ...
  6. Cage

    A term used to describe the department of a brokerage firm that ...
Related Articles
  1. Investing

    Old Stock Certificates: Lost Treasure Or Wallpaper?

    What if you've discovered some old shares in bearer form? Follow our tips and find out what they're worth.
  2. Investing

    What Does a Transfer Agent Do?

    Transfer agents maintain the records and documents related to shareholder accounts.
  3. Managing Wealth

    Index-Linked Certificates Of Deposit: Upside Potential, Low Risk

    Index-linked CDs generate returns similar to indexes, without the potential for loss.
  4. Personal Finance

    Mortgage Fraud: Understanding and Avoiding It

    There are many different ways to be victimized through home ownership - learn how to identify and avoid these crimes.
  5. Insurance

    What You Need To Know About Insurance Fraud

    Insurance fraud is as old as commerce. Discover the types of life insurance fraud and how they affect you.
  6. Investing

    What’s The Difference Between Shares And Stocks?

    In today’s markets, the distinction between stocks and shares has become blurred.
  7. Investing

    Old Stock Certificates: Lost Treasure?

    Today, most stocks reside electronically in a broker’s computer. But it is possible to stumble across a physical stock certificate.
  8. Investing

    Finding The Right Accounting Certification

    The right accounting certification can open the doors of opportunity.
  9. Small Business

    How To Protect Your Small Business From Fraud

    Small business owners are at risk of being scammed. Here's what you need to know to avoid that.
  10. How to Sell a Car With a Lien

    Vehicle owners wondering how to sell a car with a lien on the certificate of title have four options to both remove the lien holder and transfer ownership.
RELATED FAQS
  1. I lost my share certificate. Do I still own the stock?

    Regardless of whether a shareholder loses his or her stock certificate, that person still owns the shares. However, in order ... Read Answer >>
  2. How do you get a hard copy of a stock certificate?

    Before online brokers and personally-directed accounts, holding a physical stock certificate was a necessity, as this was ... Read Answer >>
Hot Definitions
  1. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  2. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  3. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  4. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  5. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  6. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
Trading Center