Expert: Steven Taylor - 12/12/2011

Question
We were recently contacted by a person who says that they have found stocks worth several thousands of dollars owned by our parents who are now deceased.  It sounds legitimate, they had names and knew who the beficiaries would be.  No money was requested up front, when we get the money then they would get their 10% fee.  They won't tell us the name of the stock, of course, because we could then track it down ourselves.  Our parents had all kinds of old stocks: mines closed down, changed names, reverse splits, became defunct etc.  A few years ago, we were contacted by a company who informed us that we were beneficiaries of a few hundred shares of a very valuable stock, so I am wondering why we wouldn't have been informed by the company in this case as well.  Are there no laws requiring companies to inform/update people about the shares they own?

Answer
Delores, that is a very good question. Yes, companies are required to to search for lost shareholders, but how hard, how far, and for how long they are required to look depends on the jurisdiction. And, how diligent the jurisdiction is in ensuring the entities they regulate actually perform the required searches. And, since searches are not easy or inexpensive, especially when the original owner(s) is deceased, how much the Company is willing to spend to track down its own shareholders.

Considering the circumstances that you described, it may be the case that these "finders" are actually working for the company in question on a commission basis. Or, they acquired the transfer/registration information through other methods, which is strange, as that information is supposed to be secure.

Regardless, unless you have a list of the companies your parents owned when they passed and can run them down yourself, I don't think you have much choice but to agree to pay these people #whatever their legality and legitimacy# the 10% finders fee.