TAKING STOCK

Lost stocks, bonds, can be replaced - for a price

by Malcolm Berko

Dear Mr. Berko:
Several months ago I realized that I could not find my U.S. Savings Bonds (worth about $11,000) and that I couldn't find my shares of Consolidated Edison, Clorox and Colgate Palmolive. I don't want my wife to know that I lost them so I asked the vice president at our bank how I could get them back from the issuing companies and how I could get our Savings Bonds back from the Treasury. He could not help me and told me to write you. The stocks are worth about $48,000. Please help me find them quickly because I don't want my wife to find out.
D.G.
Springfield, Ill.

Dear D.G.: When Lil' Bo Peep lost her sheep, she didn't know where to find them. Even I couldn't assist her and the advice she was given on how to get them back didn't help a bit. And I can't help you find your Savings Bonds nor can I help you find your shares of Consolidated Edison, Clorox or Colgate Palmolive. But I can give better advice than Bo Peep received from the various shepherdess friends if you read the following.
Lil' Bo Peep should have kept her sheep fenced in. And you should have kept your Savings Bonds in a safe deposit box and your stock certificates in the same deposit box or in safe keeping with a broker. So, shame on you.

To replace your Savings Bonds, go to www.treasurydirect.gov and fill out Form 1048. There is no cost to replace those savings bonds but there is a variable cost if someone loses  Treasury bonds. However if you own a Treasury bond, it might be worth your while to spend a few bucks and claim that it has been lost.

Several folks I know have falsely claimed they lost a Treasury bond. When the replacement is received they frame the original worthless certificate and hang it on their office wall. It's beautiful to look at, the etching is exquisite and it makes a terrific conversation piece. Anyhow, after you complete Form 1048 the Treasury will replace those Savings Bonds in about six to eight weeks.

For common stock, you will have to ring one of the transfer agents that handle most corporate records - Computershare, Wells Fargo Shareowner Services and American Stock Transfer & Trust Co. Their respective numbers are 781-575-2000, 800-469-9716, and 800-937-5449. You will have to purchase a surety bond, which will indemnify the agent against improper claims or errors related the replacement of the certificates.

But the surety bond is going to cost you a few bucks, usually 2 percent to 3 percent of the stock's current market value. For instance, Consolidated Edison has a market value today of $41 a share and your 475 shares are worth a few freckles less than $20,000.

So a surety bond is going to cost you between $400 and $600 and that's a big price to pay for being so careless with valuable property.

And once you have the surety bond it will take the transfer agent about five to seven weeks to replace your shares. In the winter of 2003 one of our clients was forced to sell 63,600 shares of Standard Oil of New Jersey (now Exxon Mobil) to settle a contentious and nasty divorce. Some of those certificates were dated in the early 1900s and were signed by the old man Rockefeller himself. They were beautiful specimens; the artwork was elegant; the penmanship spoke of Old World charm; the paper was almost parchment in feel. Some of the much older certificates were in 100-share pieces and I advised our client that those certificates had significant collector's value because they were signed by John D. Rockefeller. So he got a surety bond and replaced 22 certificates and he kept the old certificates, which were signed by Rockefeller. At that time the shares had a market value of about $35 so the surety bond for 22 certificates of 100 shares each cost him about $1,700, or about $77 each 100-share certificate. When he received the new certificates (in the name of Exxon-Mobil) he turned them over to his ex-wife's lawyer and retained the old shares in the name of Standard Oil of New Jersey.

They represent zero equity value in the underlying company but had a collector's value of (at the time) $650 per 100-share certificate.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, FL 33429 or e-mail him at malber@comcast.net.
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