Presents…

A SPECIAL REPORT:

Written By Tekoa Da Silva

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© The Dollar Vigilante and Tekoa Da Silva, 2012, All Rights Reserved
(Note: This paper is intended for U.S. & Canadian Based Investors; however, some of the concepts may be
applicable to foreign markets.)

I decided to write this paper after witnessing escalating levels of high profile bankruptcies of financial
institutions in the U.S. At the time of this writing, ailing American & European banks are receiving
taxpayer funded bailouts. The political powers are shifting financial obligations and losses borne by
private financial institutions to government balance sheets. We appear to be in the early stages of a
system-wide collapse of Western financial institutions, and ultimately, governments themselves. How
do we respond to these increasing levels of risk? Some investors are fleeing financial assets altogether
and hunkering down with physical gold and farmland. Others are caught in a state of paralysis, looking
to political leaders for guidance. More recently we saw the MF Global collapse, which brought down
thousands of investor accounts, resulting in losses said to be north of a billion dollars. These losses
included investors who simply held cash only in their accounts.

As stock investors--how are we supposed to respond and prepare if these collapses begin spreading to
stock broker dealers? How would you respond if you were informed your stock broker went bankrupt—
and you’re assets are in the hands of trustee to be split among a long line of creditors?

Many claim they’ll be protected by the Securities Investor Protection Corporation (SIPC), which insures
stocks accounts from broker collapse up to $500k for securities, and account cash balances up to $250k.
But what if you have more than $250k in cash and/or more than $500k of securities in your account?
What if one of the largest broker dealers in the country went bust, bringing down thousands of accounts
and depleting the entire reserves of the SIPC?
How Strong is The SIPC?
Additionally, we have yet to see the largest debtor In a recent conversation I had with the SIPC, I
nation in the history of the world (The United States discovered that at any given point in time, they
of America) come under budget funding pressure by only have around $1B of assets in their fund. The
the bond markets. What if two major broker dealers fund is further backstopped by the U.S. Treasury
went bust, while at the same time, the U.S. to the tune of $2.5B. Using the SIPC’s own
government suffers a major Treasury bond auction coverage figures of $500k for securities and
failure? This would result in billions of dollars of $250k for cash—all it would take is 2,000
non-recoverable losses by investors, who would accounts holders losing at least $500k in
likely never invest in the financial markets again. securities for the SIPC to exhaust its entire fund
Under that scenario you can forget about relying on base. Additionally, another 5,000 account
the SIPC. holders losing the same amount would
completely tap out the U.S. Treasury’s backstop.
With these risks in mind—what if I were to tell you
that for the cost of administrative fees, you can Lastly, the SIPC fund is funded by 4,773 member
purchase an additional layer of “common-sense companies (which has declined by 183 in 2010)
insurance” on any size stock portfolio, even on through the form of annual dues. If a large
share investments worth north of $100 million? number of their member companies go
Well that’s what I’ve discovered in my research! I bankrupt, the SIPC’s financial base may be
found there are two additional layers of substantially weakened.
preventative action you can employ starting right now to protect your shares in the event your broker

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© The Dollar Vigilante and Tekoa Da Silva, 2012, All Rights Reserved
dealer goes bust. These two methods are so reliable, that even if your broker lost all the cash and
securities held in each and every one of its customer accounts, you’d be able to sleep safe and sound,
knowing your investments would be fully protected.

Before we discuss those methods, let’s first ask the question: Who is involved in share ownership
transference? There are four parties involved in share ownership transference. They are:

1. The Publically Traded Company – The entity, or the “company”, issuing shares.
2. The Transfer Agent – The transfer agent is a privately-held book keeping vendor, hired by the
company to manage and conduct share ownership transference. The company may also use the
transfer agent for distribution services such as corporate action announcements or financial
paperwork mailings. The agreement between the transfer agent and the company is always
individual and unique. For a sample list of transfer agents, please see the Resources section at
the end of this paper.
3. The Broker Dealer – The broker dealer is the firm you open a stock trading account with and pay
to purchase or sell shares for you on the open market. There are hundreds of broker dealers,
although only a small handful dominate the industry. Additionally, many independent broker
dealers have been acquired in recent years as the western financial industry consolidated. This
means one financial entity (let’s says an investment bank) may acquire five broker dealers. In
that instance the risk of the parent company is then spread to all five broker dealers.
4. The Investor – You play the biggest role in the equation, because without you, everyone in this
share “supply-chain” would be out of business. Therefore, you are the most important link.

Now that we’ve taken a look at the parties involved in
share ownership transference, let’s take a look at the
three methods of share ownership.
There are three basic methods of share ownership, two
of which can be used to “de-risk” your shares from the
financial system. Each ownership method carries its
own set of unique pros and cons. Depending on your
risk tolerance (which is already quite low because
you’re reading this) you can reach your own conclusion
on which methods might be best for you. I will include
my own “general” risk-rating for each of the methods,
but keep in mind however, that both “de-risking”
methods are extremely conservative by mainstream
standards. Your financial advisor or broker may even
call these methods unnecessary, old-fashioned, and
out of touch with reality. But the reality today is—
owning traditional assets in traditional ways is the best
way to get wiped out.
The three basic methods of share ownership are:
The Greatly Misunderstood MF Collapse
What most investors haven’t grasped yet,
and what the mainstream media has not
reported—is the fact that MF Global was not
just a clearinghouse for Futures and Futures
Options—it was a clearinghouse for securities
as well! This means the “first domino” in the
broker dealer industry has already fallen.
Now the question remains—was this an
isolated case? And will there be more
dominos to fall?
As reported to me by the SIPC, 800 MF Global
account holders suffered ownership losses
holding shares in their accounts. Those 800
account holders are now being replenished by
the SIPC. A second question remains: How
much has been paid out, and how much does
the SIPC have left in the event of another
broker dealer collapse? This they could not
share.

1. Traditional Share Ownership Method - Street Name Registration – Street name registration is
today’s most common method of share ownership in which the shares are registered in the
name of your broker dealer. The broker acts as a third party between you, the transfer agent,

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 and the issuing company. With this method the broker is responsible for carrying out certain
tasks related to the proper ownership and management of your shares, such as depositing
dividends into your stock account.
2. “De-Risking” Ownership Method #1 - Direct Registration – Direct Registration is the process in
which your shares are digitally transferred away from the broker, and “registered” in your name
on the books of the transfer agent. You will have an account with the transfer agent, and most
corporate materials and action messages will come from the transfer agent or directly from the
company.
3. “De-Risking” Ownership Method #2- Obtaining Physical Paper Certificates – This method
means obtaining a physical paper share certificate of the company in which you are invested in.
It will be your responsibility to care for paper share certificates just as you would a deed to your
home or your own birth certificate.

Now let’s discuss each of the three methods in depth to get a better understanding of them.

Traditional Share Ownership Method: “Street Name Registration”

Ownership Risk Level: High
Largest Ownership Risk: Fraud or Bankruptcy on Behalf of the Broker Dealer

Street name registration is the technical phrase used for

traditional share ownership. An example of this would be
opening a new account with a broker dealer, buying shares of
General Electric, and leaving them in the account with the
broker. By default they would be held under “street name
registration” by your broker.

To the right is a risk diagram of street name registration. In

this method of ownership, all risk is passed down to you, the
investor. Traditionally, it has always been the public company
which presented the greatest risks; however, after MF Global,
the broker dealer may now present the greatest risk in the
ownership chain. This makes little sense, because the broker
dealer is simply a “vendor” selling you its buying & selling
services. Outside of that service, the broker is unimportant.

For the aforementioned reason, this writer considers street

name registration of stocks in the U.S. to be a “high risk” form
of stock ownership at the present time.

As also mentioned earlier, this form of ownership in the U.S.

is covered against fraud and theft up to $250k for cash
holdings and $500k for securities by the SIPC. The major
question here is if an industry-wide fraud or theft occurs
similar to MF Global—how quickly will the SIPC be able to dole-out insurance payments to everyone?
Additionally, what happens if the losses are so great, that the SIPC becomes underfunded and cannot
cover losses?

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Why have broker dealers become such risky
organizations?
Due to the repeal of the Glass-Steagal Act, the
U.S. financial industry has undergone historic
levels of consolidation. This means an
investment bank can purchase a savings bank
and a stock brokerage house—thereby pooling
and spreading risk to every account holder
within its entire organization. In this scenario,
speculative losses borne by the investment
bank parent company threaten both savings
bank customers and stock trading customers.
We’re living in an age where extreme financial events
occur quite often, and Western countries are only
now entering communal bankruptcy. Let’s also
remind ourselves that the SIPC gets is backstopped by
the U.S. government—so if the SIPC is tapped out,
and the U.S. government goes bankrupt like many
outspoken and successful investors are predicting,
good luck getting an insurance check from the SIPC!
Before we move ahead and cover the other two safer
methods of share ownership, let’s first look at the
pros and cons of street name registration.

Pros:
-You can buy or sell within seconds
-The ability to move in and out of many different stocks
-Very cheap commissions and no additional administrative fees
-Overall the fasted and most convenient method of owning shares

Cons:
-Your share may be discreetly used as collateral for you broker-dealer’s speculative investments
-Risk of broker-dealer commingling of customer account funds and broker speculation funds
-Potential hidden counterparty risk of broker dealer parent company
-Counterparty risk of clearinghouse
-Margin accounts allow your broker to lend out your shares to other investors who are “shorting” the
market
-If a black swan event occurs, you may be locked out of your account, and your broker will have full
control of your shares

Ideal For: Short term trading in financial instruments

Now let’s continue forward and take a look at the next form of share ownership called, “direct
registration”.

Share De-risking Method #1: “Direct

Registration”
Ownership Risk Level: Very Low/Low
Largest Ownership Risk: Fraud on Behalf of the
Transfer Agent

Direct registration (also called DRS for “direct

registration system”) is a method of share ownership
in which the shares are held digitally in your name on
the books of the transfer agent. These shares are
outside of the trading market system, and out of reach
of your broker dealer. Additionally, this method of

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© The Dollar Vigilante and Tekoa Da Silva, 2012, All Rights Reserved
ownership is safeguarded against fraud by the SEC’s requirement that your signature is needed at all
times before any transfer of ownership can take place.

As shown in the risk diagram above, the broker dealer is completely cut out of the ownership equation.
This means once you’re shares are registered in your name at the transfer agent—no amount of fraud or
bankruptcy by the broker dealer can harm you. However, there is a risk of fraud on behalf of the transfer
agent. It appears to be a small risk; however it cannot be fully discounted. But conversely, due to
overlapping paper trails direct registration produces (discussed further ahead), this method receives a
“very low/low” risk level by this writer (i.e., paper trails increases margin of safety).

Let’s continue forward and take a look at the pros and cons of direct registration, and then review the
method of obtaining shares using the DRS method.

Pros:
-Zero broker dealer, clearinghouse, and market
counterparty risk
-Signature needed before any transfer can take place
-More liquid than paper share certificates
-Convenience of digital storage with transfer agent
-Easy to move back and forth between the transfer
agent and any broker dealer upon your paperwork
request
-Shares cannot be lent out by a broker and “shorted”
-Shares cannot be used by the broker for collateral or
“hypothecation”
Cons:
-Not in your physical possession (although you will
have paper statements & forms)
-Both buying and selling take a few business days
-Occasional administrative fees
-Fraud risk on behalf of transfer agent
Ideal For: Medium to Long-term investments in
stable companies
ETF’s & Exchange Traded Notes
In this writer’s opinion, an ETF is only as strong
as its weakest counter party, and in most cases,
they cannot responsibly be held through either
“de-risking” method. For example, a gold
bullion ETF may be fully backed by allocated
gold stored in a bank vault. But what if that
bank is a subsidiary of a larger, collapsing
investment bank? The physical gold may be
confiscated by a bankruptcy trustee and divided
evenly among creditors—all of which suffer an
eventual loss. Additionally, a leveraged ETF may
contain assets issued by weak investment bank
counter parties. Therefore, obtaining direct
registration or a paper share certificate for such
an asset (if even possible), is a practice in
futility.
While some may see this as financial paranoia,
in today’s financial environment it’s prudent to
prepare for such outcomes.

Now how do we participate in direct registration? Let’s take a look at the steps involved.

1. Open a stock brokerage account

2. Identify the company you want to invest in
3. Call the company you want to invest in and ask two things. First, ask which transfer agent they
use. Second, confirm your ability to buy the shares and directly register them with the transfer
agent.
4. Next call the transfer agent to confirm the information supplied to you by the company.
5. Once the information is confirmed by both the company and the transfer agent, call your broker
and inform him or her that you wish to purchase shares in the company and that you further
wish for them to be held in direct registration via the transfer agent.

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 6. The broker will then begin the process of transferring your shares to the transfer agent for direct
registration. Most brokers and transfer agents will require additional paperwork, and charge a
nominal fee for this process, which should not be more than a combined total of $200 for each
company.
7. Once the broker digitally “pushes” the shares to the transfer agent, you should have a web
account with the transfer agent, which will be similar to any secure online banking style account.
However, web eligibility may be determined by the company you’re investing in, rather than the
transfer agent. So with some company shares you may not be able to “log-in” and view your
shares, but instead, you’ll receive regular statements detailing your holdings.
8. The transfer agent will both speak to you about receiving a “DRS Advice” form. This form will be
your proof of ownership of your shares, similar to paper share certificates being another form of
proof of ownership.
9. Now that you’ve received your DRS advice form in the mail and your shares are directly
registered with the transfer agent, you’re all finished!

Now that we’ve discussed the process of direct registration for your shares, let’s cover some of the
possibilities of how things could go wrong.

Possible Risks of Direct Registration - The largest risk of direct registration is fraud on behalf of the
transfer agent.

Let’s ask ourselves a few questions about this risk.

What is the likelihood of fraud on behalf of the transfer agent?

What are the chances someone in the transfer agent’s office will forge your signature and transfer your
shares to another party?
What are the chances the transfer agent will be shut down and remain under investigation for an
extended period of time, separating you from your registered shares?

When considering direct registration, keep in To be frank—these questions simply cannot be

mind broker dealers DO NOT WANT you to
transfer your assets out of their accounts. There
are a few reasons for this. First – The more you
trade the more they make, Second – They make
money lending your shares out to short sellers,
Third – They may use your shares as collateral
for their own speculative purposes. Some brokers
may impose exorbitant fees to transfer your
shares to a transfer agent—this is meant to
discourage you from doing so. If your broker uses
this tactic, call five or six other brokers and find
the best transfer rates/treatment. When you’ve
found an accommodative broker—transfer your
account to the new broker before moving all
your shares to the transfer agents. This
maneuver may help save you thousands of
dollars.
answered with certainty. Fraud and corruption
cannot be completely extinguished from society.
Additionally, an ownership “capture” of the transfer
agent industry by an investment bank would ratchet
up the risk level and increase the likelihood of a
major fraudulent event. As mentioned, the SEC
requires your written signature before any transfer
of shares can take place within the direct
registration model, however, many people might
say major banks views SEC laws as “guidelines”
more than anything else.
Some might ask the question—if my shares are held
digitally with the transfer agent, what happens if
there is an electronic attack on the transfer agent
and all their data is compromised? In that scenario,
you would present your DRS Advice form as your
proof of ownership. When your directly registered

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© The Dollar Vigilante and Tekoa Da Silva, 2012, All Rights Reserved
shares are initially processed by the transfer agent, your ownership information is also recorded in the
books of the company you’ve invested in. This creates a total of three digital and physical paper trails
connecting you to your share investment.

In reality, the odds of losing shares directly registered with the transfer agent are hundreds of million to
one. Anything can happen however, so it’s important that when you initially call a company’s transfer
agent, ask as many questions as you need to in order to feel comfortable with the process. Don’t feel
embarrassed or shy asking even the silliest of questions, because remember, they ultimately work for
you, and without your investment transfer agents would be out of business.

Let’s move on and discuss more details of direct registration.

Fees – DRS share ownership is surprisingly cheap. Some Time or Money – In today’s high-risk
companies do not require shareholders to pay any additional financial markets, the more time you
fees, so if you’re lucky, you may be able to complete the spend educating and preparing yourself
entire process for less than $100.00 per company for unseen risks, the more money you
investment. But due to the volatility of prices these days, and may end up saving in the end.
if a large influx of investors begin initiating DRS requests, Additionally, the more time you spend
anything can be subject to change. finding cheap ways to take advantage of
“de-risking” share ownership methods #1
When it comes to “corporate actions”: dividends, dividend and #2, the more money you may save
reinvestment plans, share splits or share reissuances—these avoiding administrative costs and side
announcements will either be sent to you from the transfer stepping a potential broker dealer
agent or from the company directly. Each company will collapse.
dictate its own preferred methods of communication with and through the transfer agent, so make sure
to ask about these items early on in the process when you’re preparing to initiate the direct registration.

Another item of note is paperwork such as quarterly and annual updates and reports. Each company
may have a slightly different method of distributing these. Some companies choose to have the transfer
agent process the paperwork, while others may hire an outside vendor. Again, be sure to confirm these
items early on in the registration process.

The last item we’ll discuss for direct registration ownership is the process of selling your registered
shares. This process is quite easy. You may instruct your current broker and transfer agent that you wish
to electronically transfer the shares back to the broker. Within a few business days, the shares should be
available for liquidation. You can also physically deliver your DRS Advice form (given to you by the
transfer agent) to any new broker of choice, and instruct them to obtain and sell the shares. The broker
will execute the transfer and sale on your behalf. The administrative cost for selling directly registered
shares should be free, as brokers do not wish to penalize you for bringing assets to their firm. Be sure to
confirm this ahead of time.

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Direct Registration Example: Minefinders Corporation(MFN), U.S. Based Broker Dealer, Scottrade &
Transfer Agent “ComputerShare”
I recently spoke with Scottrade about getting shares of MFN directly registered with their transfer agent,
ComputerShare. At the time of this writing, Scottrade does not charge a single penny over the commission
cost for transferring the shares to a transfer agent. However, one of my readers informed me that his
broker is asking $500 for each of his stocks to be transferred to a transfer agent. As mentioned earlier,
when you encounter this speed bump, go around it. Call five other brokers and find one that can process
the transaction for free. So in this example, administrative costs for direct registration of MFN shares
with Scottrade are: $0.00.

Let’s move on and take a look at the next and final method of share ownership, which is the best way of
de-risking your shares from the financial system and all counter parties.

Share De-risking Method #2: Obtaining Physical Paper Certificates

Ownership Risk Level: Very Low
Largest Ownership Risk: Misplaced or Stolen Paper Share Certificates

Obtaining physical paper share certificates entails working with your transfer agent to have the physical
paper shares sent to you for safekeeping. Before computer and internet technology were used, paper
share certificates were one of the only ways a person
could prove they owned shares in a company. Many
people (although in their 70s-80s now) prefer paper
shares as they don’t trust the electronic share
ownership methods.

As shown in the risk diagram to the right, this method

of ownership completely cuts out broker dealer and
transfer agent risk from the ownership equation. This
form of share ownership provides you with ultimate
control over your shares, which in this writer’s opinion,
offers the lowest level of risk among the three
ownership methods.

Let’s continue forward and take a look at the pros and

cons of paper share certificates, and the method of
obtaining them.

Pros:
-Zero broker dealer, clearinghouse, and market
counterparty risk
-Zero transfer agent risk
-Physical possession at all times
-Cannot be seized or confiscated digitally
-Moveable to any location
-Shares cannot be lent out by a broker and “shorted”

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Cons: Q: What if I live outside the U.S. & Canada?
-Added safety responsibilities (loss, fire, flood, theft) Can I still participate in DRS method
-Illiquidity, meaning it takes much longer to buy & sell ownership & Paper Share Certificates?
the shares
-Moderately higher transaction costs A: Absolutely. Foreign investors can
-Major expense involved for replacement certificates. participate in these methods with
companies using North American transfer
Ideal For: Long-term investments in stable companies agents as long as they open brokerage
accounts in the U.S. or Canada. Please see
Now, let’s talk about the steps of obtaining physical our Resources section at the end of this
paper share certificates. paper for listings of a few U.S. brokers who
accept foreign resident account openings.
1. Open a stock brokerage account.
2. Identify the company you want to invest in.
3. Call the company and ask two things. First, ask which transfer agent they use. Second, confirm
they allow paper share certificates to be issued by the transfer agent.
4. Next call the transfer agent to confirm the information supplied to you by the company.
5. Once the information is confirmed by both the company and the transfer agent, call or log-on to
your broker and purchase the shares.
6. Once the shares are purchased, instruct your broker to begin the process of transferring your
shares to the transfer agent for printing and delivery. Most brokers and transfer agents will
charge a nominal fee for this process, which should not be more than a combined total of $200.
7. When your broker transfers the share to the transfer agent on your behalf, you should then
have an “account” with the transfer agent, and an identifying account number, name, etc.
8. Once the shares are transferred to the transfer agent, call the agent to confirm the process is
moving along, and to confirm mailing address, etc.
9. Your printed share certificates should arrive in the mail anywhere from 5-15 business days of
the start of the process.
10. Now that the shares are in your physical possession, it is your responsibility to guard them with
your life!
Q: How do I use these methods for shares I
already own? Do I need to sell my shares and Now that we’ve discussed the process of obtaining
re-buy them? paper share certificates, let’s move on to talk about
the biggest risks of holding them.
A: You do not need to sell and re-buy your
shares. First research which transfer agents Risk of Theft or Misplaced Certificate- The largest risk
your companies use, confirm which ownership of holding paper share certificates is the loss or theft
methods are available by calling the transfer of the certificates themselves.
agents, and then contact your broker with
instructions on transferring your shares to the What is the likelihood of you losing your share
transfer agents. If your broker attempts to certificates?
charge you outrageous fees for the transfers,
please call the competing brokers listed in the This depends on where you choose to keep them.
Resources section below. Consider Some people may choose a bank safe deposit box, or
transferring the portfolio to another broker a secure safe in a home or office. Others may choose
before transferring to the transfer agents. an old cereal box in the basement, or inside the frame
of a painting hung on a wall. The choices are endless,

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and some hiding places may be so good, you may end up forgetting where they are. Such are the
challenges in life. If you do lose your shares, it’s not the end of the world, but it will cost you money for
replacements. We’ll talk about this further ahead.

What is the likelihood of my shares being stolen?

The chances of this happening are very small. Additionally, your shares will be listed in your name, so
the thief would need to have an inside connection at a broker dealer in order to cash them in. If your
shares are in fact stolen, there is a quick and easy remedy to solve the problem—however—it will cost
you some money. We’ll talk about this further ahead as well.

“My shares have been lost, stolen, or misplaced”

Q: I want to use these methodsof share
ownership for my stocks, but they’re
stuck in a 401k or IRA—What do I do?
A: Self-directed 401ks and IRA’s are the
best option. What the financial
community does not tell individual
investors is that self-directed retirement
accounts can offer the flexibility of
investing in nearly everything—from gold
and silver coins, to farmland, farm
tractors and oil wells. This includes shares
investments using DRS and paper
certification. Please see our Resources
section at the end of this paper, for the
names of a few companies which offer
self-direction services for retirement
accounts.
You’ve somehow lost the share certificate, and instruct the transfer agent to “stop” and replace the
shares. A common pricing arrangement might look like this:
This is an easy, but time consuming and expensive problem
to solve. When you discover that you’ve lost or misplaced
your share certificates, you would call you transfer agent.
You would explain to your transfer agent what happened.
The transfer agent would place an immediate “stop” on the
shares, much like your local bank places a “stop” on a
check so it cannot be cashed. The stop prevents any party
from being able to cash in the shares with a broker.
Once the shares have been stopped, the transfer agent
will begin the process of reprinting your share certificate/s.
This is where things get expensive. Most transfer agents
charge an administrative fee, plus a replacement fee equal
to a percentage of the total market value of the stock.
Each transfer agent charges its own specific percentage
fee, but they all range from between 1.5%-3% of the total
value of the shares in question.
For example, let’s say you held a paper certificate for one
million shares of Kinross Gold, valued at $12.00 per share.

Total value of 1mm Shares of Kinross at $12 per share: $12,000,000

Administrative Fee: $40
Replacement Fee @ 3%: $360,000
-----------------------------------------------
Total cost to receive replacement certificate: $360,040.00

Now this outcome should be taken seriously, not only because of the large replacement fee, but
because the fee must be paid in full before the replacement shares can be issued. Transfer agents are
not brokers or investment banks, so they cannot “deduct” the fee from the amount of the market value
of the shares. Therefore, until you produce the fee, you cannot have new shares issued. In the event
you cannot find the funds, there are still other methods of finding money, such as bank loans, family
loans, etc. Be sure to confirm the exact percentage rate fee with the transfer agent in advance.

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Here are replacement fee percentage rates charged by a few widely known North American transfer
agents:

Computershare: 3% of the market value of the shares, with a minimum fee of $20
CIBC Mellon: 2% of the market value of the shares
Registrar and Transfer Company: 1.5% of the market value of the shares, minimum $35 fee
Wells Fargo: 2% of the market value of the shares, plus $50 fee

As a final thought on risk of loss with paper share certificates, be sure to call your insurance agent and
ask how much he or she would charge for an insurance policy covering your shares from loss or theft. If
the cost of the policy is less than 1/10 of 1% of the total market value of your shares, it may be worth
purchasing. In that circumstance, you would be able to own fully insured paper share certificates for 20-
30 years at a cost lower than the possible outcome of facing a replacement fee.

Additional items to be aware of when holding physical paper shares are corporate actions items such as;
dividend payments, dividend reinvestment plans, share splits, reverse share splits, and company
acquisition. As mentioned earlier, each company chooses its own unique method of corporate
paperwork distribution and communication, so be sure to confirm with your transfer agent the selected
choices made by the company you’ve invested in. Companies that issue dividends may send you a check
directly, and some offer direct deposit options. So once again, the transfer agent and the company
you’ve invested in can fill you in on the exact details of how you will manage these items.

Paper Share Certificate Example: Minefinders Corporation(MFN), U.S. Based Broker Dealer, Scottrade &
Transfer Agent “ComputerShare”
I spoke with Scottrade at the time of this writing and asked how much it would cost for me to have paper
share certificates printed for Minefinders. Scottrade told me it cannot be done. Had I accepted their
answer, I would have gotten nowhere. So instead, I called the transfer agent, ComputerShare. The
transfer agent told me that indeed I could have the paper share certificates printed. What I would need to
do is first have the shares transferred to them via direct registration. Once the shares are in their account
system, they would be able to print them for me at no charge. As mentioned earlier, Scottrade offers free
transfer agent transmittal, and MFN in conjunction with ComputerShare, do not charge extra for paper
shares of MFN. So in this example, administrative costs for obtaining paper shares in Minefinders are:
$0.00. Do not be afraid to circumnavigate the broker to save your hard earned money!

Now the last item we’ll cover in this section will be the selling of your paper share certificates.

Selling paper share certificates is much easier than one might imagine. The step by step process goes
like this:

1. Choose a stock broker and open an account

2. Call the broker and confirm paper certificate mailing procedures. The majority of US-based
brokerage houses will accept paper certificates with no problem, and no extra charge.
3. Mail-in your paper certificates. It is advised that you use a highly-secure form of shipping
service such as Fed-Ex, plus insurance for at least 2%-3% of the total value of the shares. This
ensures a higher likelihood of safe delivery, as well as downside protection in the event a
natural disaster destroys your shares on their way to the broker.

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© The Dollar Vigilante and Tekoa Da Silva, 2012, All Rights Reserved
 4. Within a few business days, your broker should receive and deposit your paper shares into their
system. After a few business days of clearing, your broker should be able to sell your shares.
Once the shares are sold and your proceeds have “settled” in your account, you should be able
to wire the funds home to your local bank.

When it comes to selling your paper share certificates, the transaction fees are much smaller. Many
brokers do not charge any additional fees or higher commission costs when processing a sale of paper
shares. However, always ask in advance the exact amount of every single transaction item cost.

This wraps up our second and final method of de-risking your shares from the financial system.

“BulletProofing” Your Shares: You Are in Control

The most important discovery I made in preparing this paper, was the realization that alternative
methods of share ownership are far easier and cheaper than I ever expected. Broker dealers will not tell
you this. They will not recommend you take delivery of paper shares or use direct registration, and the
reason is simple. The industry as a whole wants you to trade stocks often, and more importantly, they
want control and custody of your assets. Decades ago it was safe trusting broker dealers. Today, as
we’ve learned through MF Global—it’s flat out dangerous. You may continue to hold your shares under
the traditional “street name registration” method through a brokerage account, but beware. All it takes
is one spark for a house of cards to burn, and once the fire starts, it will be too late to put it out. So the
bottom line is this—paper share certificates & direct registration are layers of insurance which are so
easy to and cheap to use, they cannot be left out of your investment toolbox.

Best of luck with your stock investments,

Tekoa Da Silva

Ways of reaching me:

www.bullmarketthinking.com
youtube.com/tekoadasilva
linkedin.com/in/tekoadasilva
twitter.com/TekoaDasilva

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© The Dollar Vigilante and Tekoa Da Silva, 2012, All Rights Reserved
Special Offer
If you are not currently a Dollar Vigilante subscriber but would like to subscribe to get regular access to
this type of information, TDV is offering to deduct the price of this report to any annual Basic
($150/year) or Premium ($250/year) new subscription. Just email support@dollarvigilante.com and let
them know you purchased “BulletProof Shares” and wish to sign up to the full Dollar Vigilante
newsletter at a discounted rate.

Resources

Online Discount Broker-Dealers:

Scottrade – Scottrade offers cheap commissions and free share transfer to the transfer agent.
Additionally, they offer customers in the Asia-Pacific region the ability to open an account on U.S.
shores.
http://about.scottrade.com/

Optionsxpress – Optionsxpress offers cheap commissions and free share transfer to the transfer agent.
Additionally, they offer foreign customers the ability to open an account on U.S. shores.
http://www.optionsxpress.com/

Self-Directed Retirement Account Administrators

New Direction IRA Inc.

http://newdirectionira.com

Guidant Financial Group Inc.

http://www.guidantfinancial.com

Securities Industry Information

The Securities Transfer Association, Inc. (STA)

http://www.stai.org

STA Member Guidelines:

http://www.stai.org/pdfs/111872-sta-guidelines-book-rev-6.pdf

STA Direction Registration Processing Guidelines:

http://www.stai.org/pdfs/Profile-Guidelines-April-2009.pdf

List of STA Member Transfer Agents:

http://www.stai.org/stamembers.php

Securities Investor Protection Corporation (SIPC)

http://www.sipc.org

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© The Dollar Vigilante and Tekoa Da Silva, 2012, All Rights Reserved