Where do Lost Stocks and Dividends go?

The Securities and Exchange Commission estimates that there are over 3 Million people in the country who are entitled to lost dividends and stocks that are worth over $10 Billion.

The most common reasons for this happening are:

-Changing address and not having your mail forwarded - either an error on the part of the individual or the Post Office.

-The death of a family member where no records of stocks owned are available.

-Holding stocks in a company that was merged with or bought out by another resulting in stockholder confusion.

All the stocks and dividend checks that are undelivered are returned to the sender, in other words the company. The company is required by law to retain these funds for future payments should people subsequent become aware of their entitlement and come forward to claim the lost stocks and dividends.

The laws covering the maintenance and utilization of these unclaimed funs vary from state to state. But all states require that anyone present proof of ownership of the stock or entitlement to the unclaimed dividend must be given the stock and the dividend amounts, often with accrued interest.

In case of stocks that are found for a company that is no longer listed on any stock exchange, there may still be residual value on the stocks of the company was bought or merged with another company that is still in existence. Again by law, the merged or owner company is required to keep records of all unclaimed new stock issued post merger or buyout as compensation for shares held in the now merged or sold company. These stocks and any dividends accruing from them have to be given to the rightful owner when a claim is made.

Lost stocks and dividends do not go anywhere. If they are not delivered to the stockholder, they revert to the company which holds them until they are claimed. In the case of stocks that have been lost by the Post Office, the stockholder will have to trace the consignment and claim it. Since stocks are sent by register or first class mail, they can be found. For dividends that have been lost, bank records will prove the checks were not enchased and duplicates may be issued.