NorthWest Biotherapeutics Inc (NWBO)

[biosectinvestor]

Brokers will tell you no. The law suggests that no is the correct answer. But there are those who claim practice is otherwise. I can’t tell you if practice is different, but the reality is is that your brokerage account is a trust account. They hold your securities in trust. Firms get in trouble when they do not hold shares for you and effectively gamble with other people’s wealth to enrich themselves.

Brokerages want you to think FTX is not normal, in that context. FTX used their clients funds and coins to bet the house and speculate. Generally that is true and auditors look for such abuses. Helping themselves to your shares held in trust is criminal. But between agreements that may be vaguely permissive (meaning you may have agreed), and omnibus accounts to which our names are attached for a specific number of shares, and the fact that the shares are fungible, it may not always be absolutely clear. But they are generally speaking, not supposed to do it. The justification is that you borrowed, this is our collateral and it is fungible. We can liquidate it into cash to manage the risk of your debt, which you might not repay and this collateral could go to zero, so we need cash to manage that debt in your account… we’ll create an offsetting obligation to hedge both ways with another counterparty… and we have cash AND have the risk of your not paying by having a much larger party pay us to borrow your shares….

Not sure if that is clear, but that’s kind of what goes on.