From time to time we are asked about our process for locating lost shareholders and their abandoned property. Continental Stock Transfer & Trust has an agreement with Keane to assist our issuers in locating lost shareholders. Keane plays a pre-eminent role in this field, acting on behalf of scores of high-profile Fortune 500 companies, as well as a number of large transfer agents.
Keane provides mandatory due diligence of lost and unresponsive shareholders’ accounts under SEC Rule 17 Ad-17. This rule was instituted by the SEC in an effort to both reduce the instances of shareholders who lose contact with their property, as well as, assist in reuniting shareholders with their assets.
The 17 AD-17 due diligence process entails two “mandatory searches” as outlined in the SEC Rule. These searches are cost free to the shareholder. As part of Keane’s abandoned property services, Keane offers your shareholders an additional search alternative, which is their asset-recovery program. The program locates abandoned property not found during the mandatory searches. Keane then offers your shareholders the opportunity to sell recently recovered assets at rates that are lower than customary brokerage fees. Keane charges a fee for this asset recovery service.
As always, shareholders continue to have the opportunity to contact Continental directly to update their shareholder information and address at no charge, rather than utilizing Keane’s recovery services. The advantage to the issuer in the location process is that any previously abandoned property is returned to the rightful owner, and not escheated in accordance with the dormancy periods prescribed by the various states. Accordingly, your escheatment charges are reduced and most shareholders are reunited with their underlying assets.
Again, SEC rule 17 Ad-17 search process is cost free to the shareholder. Processing fees charged by Continental are not borne by the shareholder.