United Western Bancorp Inc (fka UWBKQ)

[imawswami]

Etrade letter (needing modification)

E*trade letter to corporate & broker....

This was sent to corporate and the NJ brokerage. Not suggesting
this as a template to other etrade holders of UWBKQ because am using a unique approach to maintaining shares within the account. That is the right to pay the DTC fee charged monthly to the broker for non-transferable shares. Ally Invest, the brokerage arm of Ally bank, passes the cost of the non-transferable security onto the customer.

By denying the shareholder the right to pay such fees, the brokerage violates the fiduciary duty to protect account assets. The shareholder then is unilaterally exposed to seizure of property, simply because a fee (which the shareholder could provide if allowed) is not being made.

If an unfavorable response is receive, will send letters to E^trade counterparts with the merging corporation Morgan Stanley to see if they approve of such a reply to their future customers and hopefully extract a positive resolution.

It's not everyday a customer asks to pay fees!

Would make an interesting lawsuit: Shareholder Sues for the Right to Pay Fees to Prevent Broker Seizure of Account Assets!?

Wonder if the WSJ would run a piece on that.....

I realize that not everyone may wish to take this approach, but it is one my brother and myself are taking.

Special thanks to Bob and Fred for all inspiration. Needed that a lot.

Recipients:
Michael A. Pizzi Chief Executive Officer
Lori S. Sher SVP General Counsel
David Inggs Chief Operations Officer
Corporate Actions Team
Date: 4-22-2020
xxxxxxxxx
Accounts:xxxxxxxx
Address:xxxxxxxx
email: zzzzzzzzzz

xxxxxxxx
Account: xxxxxxxxx
email: xxxxxxxx

Dear E*trade Securities LLC,
On Friday April 17th, I and my brother were informed that personal property, United Western Bancorp (UWBKQ) securities in accounts xxxxxx,xxxxxxx, and xxxxxx would be removed in 30 days for the stated reason:

"...has been classified as non-transferable by the Depository Trust Company (DTC). DTC deems securities for which transfer agent services are not available and have not been available for six years or longer, and which are often inactive or insolvent subject to DTC's position removal program (PREM)."


On Monday April 20, 2020 I contacted the corporate actions team, where it was stated to representative XXX that I do not authorize removal of property from the account, even expressing a willingness to personally pay the monthly maintenance fee the DTC (Depository Trust Company) charges E*trade for holding these non-transferable securities.

After consultation with his superior, the representative stated he could not accommodate such a request. This occurred even after i expressed that ALLY Financial Corporation's (ALLY:NYSE) subsidiary ALLY INVEST (brokerage) addresses the issue of non-transferable securities held in the account by collecting a fee from the shareholder, thus preserving the asset.

As a fiduciary, Ally seems to grasp the duty to client and the liability implied when personal property is removed by the broker's hand without the customer's right to remedy through transactional recourse. [Alas, in this Age of Information, a digital imprint must suffice for property.]

By allowing the shareholder to offset the debt E*trade incurs (at the hand of the DTC) for non-transferable securities, the customer bears the onus or fate of the security, rather than the broker. Failure to pay implies consent to remove the securities in question. Legal liability is lifted, revenue generated, and customer frustration mediated.

Additionally, it should be noted, United Western Bancorp is an active corporation, having favorably concluded a unanimous SCOTUS ruling on their Tax Refund against the FDIC on 2-25-20:

SUPREME COURT OF THE UNITED STATES

RODRIGUEZ, AS CHAPTER 7 TRUSTEE FOR THE BANKRUPTCY
ESTATE OF UNITED WESTERN BANCORP, INC. v.
FEDERAL DEPOSIT INSURANCE CORPORATION,
AS RECEIVER FOR UNITED WESTERN BANK

This bancorp is also in the middle of bankruptcy (last filing 2-24-20) by-way-of FDIC bank seizure following losses of $500,000,000 in mortgage backed securities (MBS) held.


https://www.plainsite.org/dockets/mx8lmbli/colorado-bankruptcy-court/united-western-bancorp-inc/


United Western Bancorp, Inc.
Bankruptcy Case Colorado Bankruptcy Court, Case No. 12-13815
District Judge A. Bruce Campbell, presiding

[Logo of US BANK was included as copied from plainsite BK page}

U.S. Bancorp Corporation U.S. Bancorp Corporation, Debtor
Officially listed as "United Western Bancorp, Inc."


The implication in the above statement is important: U.S. Bancorp Corporation, Debtor Officially listed as "United Western Bancorp, Inc."

Through a trace in Change of Ownership, Plainsite.org perceives such a transaction has taken place during bankruptcy, with U.S. Bancorp assuming the debtor position until resolution.

A company such as United Western Bancorp, incurring losses through subsidiaries in excess of $500,000,000, could become a target of acquisition by a larger (read profitable) entity in order to acquire the tax offsets (NOL). It would seem that U.S. Bancorp (holding company for the 5th largest bank in the US) has acquired UWBKQ.

Typical purchase rate is near 30% of loss, placing the value of UWBKQ acquisition at close to $150,000,000, less current bankruptcy debts close to $50 million. $100mm divided among 30mm shares would place the value at $3.33/sh.

This security has substantial value, something am sure the DTC would fret over while destroying the physical non-transferable shares. The combined Etrade accounts in question possess over xxxxxx shares of United Western Bancorp, or nearly x% of the outstanding.

It should be obvious to a brokerage firm in the midst of merger (Morgan Stanley 19th largest U.S. Bank), that maintaining their client's best interests -including preserving a tangible record of account value- is paramount.

To summarize the above: United Western Bancorp is an active company which should allow this security to avoid the non-transferable status and remain in shareholder's account. From other UWBKQ shareholders with Schwab brokerage accounts, this is the conclusion that Schwab made in keeping the non-transferable shares in their respective accounts during the Schwab/TD Ameritrade merger.

If you wish to assess a fee covering the DTC maintenance costs, we would gladly pay. Not often you read a customer stating this am sure! The fee does remove any burden of liability, while generating a novel revenue stream. If the shareholder fails to pay, the brokerage has free rein to remove with implied consent. Customer tranquility is maintained.

If though you persist in removal of personal property, thus denying the right to preserve personal property in an account, i will first contact your counterparts with Morgan Stanley, followed by legal action if this matter is not resolved.

Respond within 14 days of receipt of this document. Legal consideration requested.

Thank you