If you have lost or misplaced securities , chances are investor relations will send you to the transfer agent that manages the shares. This may very well be Computershare as they are one of the largest transfer agencies in the country. The transfer agency will issue a “stop transfer restriction” on these shares. This will prevent someone from trying to transfer the shares into the finder’s name and theoretically stealing the shares form the rightful owner.
That is just the first step. At some point you will want replacement stock certificates issued to you. The transfer agency will issue a letter to you explaining the steps to have the shares replaced. One of the items you will need to secure to replace the certificates is a lost stock certificate surety bond. If Computershare is the transfer agency, they will include a handy application, affidavit and request for premium to obtain the bond for you. Why are they being so nice you may ask? Because a subsidiary of Computershare will sell the bond to you. This is where your money saving opportunity arises.
Computershare started its own insurance agency just to make a profit providing lost securities bonds. However, unlike Computershare Insurance services, Surety1 (as well as some other bond agencies) represent over a dozen different surety bond markets. As such, We can routinely provide the exact same surety bond at a third, to sometimes even half the price. the underwriting requirements are generally the same. The bond premium is based on the value of the lost shares as of the date the stop notice is issued. If the value of the shares was $500,000, for instance, Computershare Insurance services will charge you $15,000 for the bond. If you applied with Surety1, we can usually issue the require bond for $10,000, and sometimes even less.
Because Computershare makes money by selling you the bond, they try to make it difficult for another agency to provide the bond by rejecting bond forms. Almost every bond we provide to Computershare is rejected by them the first time. It does not matter if we provided a bond previously on the exact same form. I suppose they have had success using this method, however, of the 50+ bonds we have provided to Computershare over the years, we have never not been able to accommodate their requests, regardless of how ridiculous they are. We have requested from Computershare a form they will accept, only to be told that is not their job. It is obvious that Computershare want s to make a profit off of the bond, even if it cost you, the consumer more money. Be a little patient and we can get the surety bond accepted. It may take a few tries but in the end we always prevail.
Surety1 has been a leading provider of surety bonds nationwide since 2003 and maintains an A+ rating with the Better Business Bureau.