Paul Fisher (rao) wrote,
Paul Fisher
rao

Moronic systems

For a particularly complex stock transaction that I've been working on for some time, the SEC requires the transaction be Medallion Signature Guaranteed -- think of it as one step up from a notary public, with the main catch being that the organization that is doing the authenticity checking of my signature is liable for the financial value of the transaction resulting from that signature, if the signature is forged. All parties that participate in the Medallion programs have insurance to cover fraudulent transactions.

So in theory, I should be able to call up a local bank (I have all my financial accounts with businesses that lack Boston offices); ask them for a Medallion Signature Guarantee; pay them some money; show them a whole bunch of IDs; have them fill out some paperwork, and then put a magical stamp on the same piece of paper as my signature. That would seem to make the most sense.


Instead, the system is much more broken than that. Contrary to what information I've been given from my broker, transfer agent, and others, it's not possible to get a Medallion Signature Guarantee from any Boston-area bank/brokerage/etc without having an account with them. So, my solution to this problem was to open up a $10.00 savings account with a local bank, that has a $10.00 minimum balance, charges no fees for Medallion Signature Guarantees, and will send me monthly statements for that $10.00 balance. SMART BANK. I would have preferred to have simply paid them $10 per Signature Guarantee. Instead, they will be spending way more than $10 servicing my minimum-balance savings account.
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