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Depositing Physical PinkSheet or OTC Stock Certificates

How to get paper penny stock shares into an online brokerage...

Having a physical stock certificate for a penny stock is not a very common occurrence, but it does happen, and doing something with those shares (most likely selling them) can be very difficult. Penny stock companies will often pay freelancers or contracted employees with company shares. This may seem well and good if the stock trades enough and has some potential, but when you decide to cash you shares in you will likely hit a roadblock.

The problem is that most stock brokers won't touch a physical stock certificate of a company on the OTC or PinkSheets. So, you're left holding a fancy piece of paper that is essentially worthless. You can try to deposit the shares with a broker that has 'brick and mortar' locations, and we've heard a couple of success stories with brokers like E*Trade and Schwab. However, we've also heard of people being declined, and sometimes the story goes that it 'depends on who you talk to'. So, this option may be worth a shot if you already have an account with one of these brokers, but we simply cannot guarantee that it will work.

With a little google'ing and research, we've found a broker that will accept physical stock certificates for OTC/PinkSheet companies. That broker is called Glendale Securities, Inc. Here is a snippet of what you will find at that link:

"OTCBB/OTCQB/Pink Sheet Stocks

We generally accept for deposit, subject to documentation requirements and compliance review, OTCBB/OTCQB/Pink Sheet stocks that meet the initial criteria:

  • Do not have a "Caveat Emptor" status on
  • Are not subject to unsolicited quotes only, and are not classified as "Grey Market"

Contact us today at (818) 907-1505 ( option 2 ) to see if we can accept your physical certificate. In most cases we can provide you an answer within a few minutes."

So, the company cannot have Caveat Emptor status, or be trading on the 'Gray Market'. The fee to deposit the certificate is $250 if you are a non-affiliate (most likely), and $500 if you are affiliated with the company. The site goes on to describe the required documentation to process the deposit. You will need an account at Glendale Securities to deposit the shares into.

There also cannot be a legend on the certificate (signifying that the shares are restricted). Restricted stock is usually restricted for one year, after which you can send it to the company to have the legend removed. This will likely cost some money as well.

If you have any questions regarding your certificate, it's status or whether you can deposit it, please contact Glendale Securities directly. They will have a much more accurate answer to your question than we can provide! Good luck!


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Last updated: 12/22/11

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