The stock exchange yesterday cautioned stockbrokers and investors after a case where share certificates were illegally altered, resulting in collective losses of more than $1 million for several brokers. The brokers who suffered the losses are understood to have reported the case to the police. The exchange yesterday issued a warning to brokers and investors after certificates involving shares in China Overseas Land & Investment and some other listed companies were modified. While there have been several cases of fake certificates in the history of the exchange, this is the first time it has found altered certificates since it was unified from four exchanges in 1986. An earlier case arose in 1980. The exchange yesterday warned that a case had arisen where a registered shareholder, holding shares through a company, had altered its share certificates to increase the number of shares represented. The corporate shareholder had applied to split his shareholdings in China Overseas Land & Investment into odd lots, from a certificate of 400 shares into 200 certificates each representing two shares. The shareholder then allegedly altered the odd lot certificates by adding three zeros after the number two, changing them from '2' shares to '2,000' shares. The fraudulent certificates were then sold to several brokers in transactions amounting to more than $1 million. The case was discovered when the brokers submitted the altered certificates for registration. The exchange said it was aware that similar arrangements had been made to split share certificates in some other listed companies into smaller odd lots. The exchange has informed broker members about the details of other split share certificates. The exchange has reminded broker members they need to ensure the certificates they give to their clients must be in good title and freely transferable. If not, brokers may suffer any losses arising from buying the altered certificates which they cannot sell to clients. It is understood that the brokers who suffered losses from buying the altered certificates could apply for insurance compensation. An exchange council member said the case reflected the fact that share certificates could too easily be tampered with and recommended that they be changed to show English block letters rather than numbers. He said share registrar companies should also notify the exchange and Hong Kong Clearing if they discovered any unusual applications to split share certificates into odd lots.