What is a Medallion Signature Guarantee?

Stockbroker Law - Tuesday, September 13, 2011
What is a Medallion Signature Guarantee?

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.


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