What is a Medallion Signature Guarantee?

STOCKBROKER LAW - Posted on September 13, 2011

The Medallion Signature Guarantee is an accepted protocol within the
Financial Services Industry whereby certified signature guarantors, usually affiliated with an
established financial institution, serve as signature guarantors for certain financial documents
requiring the heightened level of review, scrutiny and security offered by the Medallion Guarantee
Signature Guarantee Program.

Medallion Signature Guarantees are now required by many brokerage firms when
processing documentation associated with the transfer or redemption of financial accounts containing
securities such as stocks, bonds and mutual funds. Even with the supposed guarantees of the
Medallion Signature Guarantee Program in place, however, unscrupulous financial advisors engaging in
fraud, theft and Ponzi-schemes have nonetheless been able to procure Medallion Signature Guarantees for
transfer and redemption transactions.

The signer of a Medallion Signature Guarantee essentially certifies, by way
of a proprietary, multi-colored ink stamp and an accompanying signature, that the signature of the
customer who signed the subject documentation containing the Medallion Signature Guarantee is in fact
genuine and that the signature of the purported signer has binding legal authority.

Unfortunately, many firms who have the Medallion Signature Guarantee Program
in place have simply failed to follow their own procedures or failed to assure that signatures requiring
Signature Guarantees Medallion Guarantees are used in the first place. Additionally, some
unscrupulous brokerage firms and individuals have been able to properly utilize the Medallion Guarantee
and Signature Guarantee stamps in furtherance of securities and investment-related fraud.

We offer a free consultation with individuals who feel they have been
victimized by improper procedures or scams associated with the improper use of Medallion Guarantee
Signature Guarantees resulting in financial loss.