What is a Lost Instrument Bond in California

Lost Instrument Bond in California

Legendary College Football coach Bobby Bowden was once asked why his wife wasn’t with him at an awards banquet.  His response (paraphrased response):  “Well, you just can’t remember everything”. How many of you have ever guilty of losing your keys?  The remote?  Or, heaven forbid, your cell phone?  Show of hands . . . .?  By your response it seems universal that things get misplaced.   I was browsing around Investopedia today and I came across an interesting page about what happens when someone loses a stock certificate.  (See full article here: http://www.investopedia.com/ask/answers/07/lost_share_certificate.asp)  I was suprised to learn that replacing a lost stock certificate is actually easier (and less emotionally painful) than replacing your cell phone.  The main reason this is so is because of a surety product called the Lost Stock Certificate Bond or the Lost Instrument Bond.  

The Lost Stock Certificate Bond is the linchpin in the stock certificate replacement process.  Basically, the bond certifies that, if the original certificate somehow shows up at a later date, the transfer agent and issuing corporation are protected.  Without the bond, agents and corporations would have too much risk hanging over their heads and wouldn’t want to issue any new certificates without an insurance policy.   The lost stock certificate bond is just this insurance policy.

This is not a process unique to a specific state.  Replacing your lost stock certificate is uniform nationwide.  That’s right:  all 50 states.  And to begin the process, the individual must first contact the issuing corporation’s Transfer agent.  According to SEC.gov, the transfer agents provide three key functions for the issuing corporations:  1. Issue and cancel certificates to reflect changes in ownership. 2. Act as an intermediary for the company.  3. Handle lost, destroyed, or stolen certificates. (See link:  https://www.sec.gov/answers/transferagent.htm for full post and description on each of the three functions.)  The easiest way to find the appropriate transfer agent is to contact the corporation’s investor relations office (often found on their website).  After contacting the agent, the investor must describe the type of certificate and the amount of loss followed by procuring the aforementioned Lost Stock Certificate Bond.  Once this is done, a new certificate will be issued.

See?  Not so hard.  Way easier than replacing all of those valuable family photos that you have neglected to back up on your phone.

If you have any more questions regarding the Lost Stock Certificate Bond or the process of replacing lost certificates, please contact the friendly and knowledgeable staff at Jurisco.

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