Beas, as I understand it, it's pretty simple. If
Post# of 36533
So, for example, suppose you had 100 shares prior to GNBT's record date. There are 100 dividend shares from GNBT now attached to those shares. If they get sold to buyer B, the 100 dividend shares are part of that transaction. If buyer B sells them to buyer C, they continue to be attached to the original 100 shares, and are now transferred from original buyer to buyer B to buyer C. And so on and so on.
With computers, it's probably just a simple data base that works off a specific ID for each share and the pairing with the dividend share. So there shouldn't be any real problem following the shares around as they are bought and sold. There may be a short lag from the day the actual dividend is paid until the final holder receives the shares, but it shouldn't be longer than the three day settlement time.
The only folks that would have a different liability are those that are not entitled to the dividend by agreement. If they sold shares, it is my understanding that they would then be liable to produce the dividend shares themselves. I assume the transfer agent has this info, and would be responsible for collecting the dividend shares from someone that wasn't originally entitled to them, but sold their shares anyway. In that case, I'm assuming it is a margin call type of transaction that can be enforced by some means.
Anybody see this different?