Mutilated Security

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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.

INVESTOPEDIA EXPLAINS '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. 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 Full 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 Full Answer >>
  3. How does the ISIN numbering system work?

    The International Securities Identification Numbering (ISIN) system is an international standard set up by the International ... Read Full Answer >>
  4. What are some advantages of ordinary shares?

    Ordinary, or common, shares have many benefits for both the investor and the issuing company. For individuals, investing ... Read Full Answer >>
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    Preference shares, also known as preferred shares, have the advantage of a higher priority claim to the assets of a corporation ... Read Full Answer >>
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