When the Delaware Chancery Court ordered David Murdoch to pay the shareholders of Dole Food Co. an extra $2.74 per share after taking the company private, it seemed easy enough. The lawyers for the shareholders posted a claim form, and shareholders submitted claims for over 49 million shares. The only problem? The company only ever issued 36.7 million shares.
Cointelegraph
The root of this problem is a 1960s system for determining who owns a share of stock. According to Investopedia, the Depository Trust Company (DTC) was created because the New York Stock Exchange couldn’t keep track of who owned what anymore. Trading volume was simply too high. Indeed, in 2012, the DTC settled over 299 million shares with a value of $110 tln.
When you buy a share of stock from your broker, your broker informs the DTC that it represents somebody who owns a share of that stock. When a company wants to find out who owns their stock, they have to ask the DTC to consult its list of brokers, and then the brokers have to be asked who they actual owner is of the shares in the broker’s account.
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://cointelegraph.com/news/delaware-approves-tracking-of-stock-ownership-on-blockchain-major-effects
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit