Well I have heard from an independant broker that the number of shares that show up on your statement does not guarantee that you actually own those shares. For example, lets say retail guys like myself at BMO Investorline have bought 1 million shares, and paid in full. Three days after the purchase the transaction should be settled with 1 million shares appearing at BMO. They will show up on my statement, but they are actually registered to BMO as my agent. Now what if BMO only takes delivery of 500,000 shares? There are guys like me that have paid for shares and they show up in my portfolio account, but as far as the transfer agent is concerned, only 500,000 shares are registered to BMO. See the problem?

Now one would assume that BMO would go after those parties on the sell side and demand the shares that were not delivered. One would assume some fidiciary responsibility to confirm shares are delivered before my account is debited and the shares are reported in my portfolio. I have heard that is actually not true, and in fact such phantom shares are common.

I have no way to verify if this is correct. I am sure somewhere in the fine print of the 10 pages of documents I must sign to be a client of BMO there must be some waiver that exempts them from damages if they do not actually complete a transaction. Just how is the retail guy supposed to know?

Cheers!

mike