"As a result, a beneficial owner’s ownership cannot be tracked to specific shares but rather its ownership interest is represented as a securities entitlement at his or her broker-dealer. Each of those beneficial owners don’t own the actual shares credited to their account " https://www.sec.gov/news/speech/2007/spch101607ers.htm
There can however be more security entitlements than total shares issued by the company.
I see this was a speech by the SEC’s Director of Market Regulation.
For anyone wondering/looking, you can find the quote 6 paragraphs down (3 down from “What is the problem?” section).