Definition of Dummy stockholder

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TeachMeFinance.com - explain Dummy stockholder




historic definition...

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.



About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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