NorthWest Biotherapeutics Inc (NWBO)

[flyfishingcherokee]

Doc Logic post 229448 Who loses if shares never delivered?

In the situation described as an account holder in Schwab who has allowed Schwab to "rent" the account's shares in a position and the borrower fails to deliver the shares back to the account, the question is who is liable to reimburse the account for the loss incurred?
it seems to me that Schwab would be the first in line to make the account whole as they alone chose who to lend the shares to and has the obligation to oversee the transaction to completion. Schwab would then certainly take action against the borrower who fails to make the transaction complete. In the event of default by the borrower and insolvency, Schwab would have notified their E&O carrier early on in the transaction and the carrier would then provide funds, as per the Schwab coverage contract, and assume action against the borrower.
In the unlikely event that the account owner is still not made whole, a good litigation attorney for the account owner would sue everyone involved and let the court decide who is liable for reimbursement, which could result in more than one party held liable