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. 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 >>
  2. I hold stock certificates in a company that just had a stock split. What happens ...

    The short answer is that a stock split will have little effect on the holder of stock certificates. In most cases when an ... Read Answer >>
  3. 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 >>
  4. What should I do with my suspended security?

    A stock in my brokerage account has been suspended from trading. Consequently it also has a 'frozen' relationship ... Read Answer >>
  5. What protects an investor’s interest in the case of terrorist sabotage, or act of ...

    Currently, most stock ownership is done electronically thru the combined effort of the brokerage firms and the transfer agents ... Read Answer >>
  6. Can I give stock as a gift?

    Stocks, bonds or any other securities can be transferred as gifts. Giving the gift of stock also has benefits for the giver. ... Read Answer >>
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