TeachMeFinance.com - explain Dummy stockholder
Dummy stockholder -- One who holds (in whose name is
made out and stands) stock which in fact belongs to another.
It is a common practise for large owners of stocks to have
their stocks made out in the names of clerks and brokers. The
purpose is to conceal the actual ownership.
When a broker buys stock for a speculator the certificate is
not made out in the name of the speculator. A certificate
signed (assigned) in blank (see Assigned in blank) by the
original owner is received by the buying broker from the selling
broker and this certificate may on the resale of the stock
be delivered to the new buying broker, and so on, the same
certificate continuing to serve indefinitely in transactions.
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