SEC's Efforts To Find Lost and Stolen Securities
GGD-84-42
Published: May 18, 1984. Publicly Released: May 18, 1984.
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Highlights
The Securities and Exchange Commission (SEC) maintains a program to find securities, such as stocks and bonds, that financial institutions and their customers report as lost or missing. GAO reviewed the SEC program to determine its effectiveness in finding such securities.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| United States Securities and Exchange Commission | The Chairman, SEC, should, at a minimum, notify financial institutions to comply with the program requirements that call for dollar values to be specified for all securities that are reported to the program. |
Closed – Implemented
SEC reemphasized to participants the importance of reporting dollar values for securities they report as lost or stolen, via correspondence and news releases directed to the institutions.
|
| United States Securities and Exchange Commission | The Chairman, SEC, should include in any accomplishment report only those securities actually found by the program. |
Closed – Not Implemented
Action was taken during the GAO review to correct this deficiency, but GAO was not notified until the exit conference. An accomplishment report is not appropriate.
|
| United States Securities and Exchange Commission | As an initial step toward improving the program's capability to find lost and stolen securities, the Chairman, SEC, should require that lost or stolen securities formerly required to be reported to the Federal Reserve Banks be reported to the SEC program. |
Closed – Implemented
SEC approved the amendments to Rule 17f-1, including registered form government securities in the SEC Lost and Stolen Securities Program, on September 15, 1988.
|
| United States Securities and Exchange Commission | As an initial step toward improving the program's capability to find lost and stolen securities, the Chairman, SEC, should assess the effect of the underreporting of lost and stolen securities without a securities industry identification number and, if warranted, direct the program operator to assign identification numbers to these securities. |
Closed – Not Implemented
SEC, on a pilot basis, allowed participants to report and inquire about non-CUSIP securities on a voluntary basis. SEC voted not to include this as an amendment, but will continue voluntary reporting.
|
| United States Securities and Exchange Commission | As an initial step toward improving the program's capability to find lost and stolen securities, the Chairman, SEC, should develop a pilot program to assess whether the $10,000-or-less transaction exemption should be continued, weighing the regulatory compliance burden against the improvement in securities found for financial institution customers, as well as the decreased deterrent effects. |
Closed – Implemented
Based on comments received from the public and the industry, SEC voted to retain the $10,000 transaction exemption. Commentators thought the associated costs and benefits did not warrant changing the exemption.
|
| United States Securities and Exchange Commission | The Chairman, SEC, should, in consultation with the bank regulatory agencies, concentrate on obtaining improved compliance with lost and stolen securities regulations by ensuring, through appropriate enforcement and administrative actions, that financial institutions become registered with the program and that registered institutions report lost and stolen securities and check the status of securities received. |
Closed – Implemented
SEC: (1) sent financial institutions reminder notices of their responsibilities; (2) clarified bank examination report requirements to encourage compliance with the Lost and Stolen Securities Program; and (3) after seeking public comments, decided to maintain its existing procedures for notifying law enforcement agencies of lost, stolen, and recovered securities.
|
| Department of Justice | The Chairman, SEC, and the Attorney General should link SEC and NCIC lists of lost and stolen securities. |
Closed – Implemented
SEC and FBI reached an agreement in principle in October 1986 to link the two systems. FBI will retain its independent system, but it will periodically incorporate its data into the SEC system.
|
| United States Securities and Exchange Commission | The Chairman, SEC, and the Attorney General should link SEC and NCIC lists of lost and stolen securities. |
Closed – Implemented
SEC and the Federal Bureau of Investigation (FBI) reached an agreement in principle in October 1986 to link the two systems. FBI will retain its independent system, but it will periodically incorporate its data into the SEC system.
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Topics
CrimesFinancial institutionsLaw enforcementLossesNegotiable instrumentsNoncomplianceReporting requirementsSecuritiesSecurities fraudSecurities regulation