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Post# of 159752
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CarltonH

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CarltonH

Re: janice shell post# 153153

Saturday, 08/11/2012 5:53:09 AM

Saturday, August 11, 2012 5:53:09 AM

Post# of 159752
In 2005, did brokers also have an option to allow such naked shorts to be pledged as collateral for bank loans or finance the broker-dealers' business?

NO, that practice had been made illegal in 1970 with the Securities Investor Protection Act.

It was following this act that the SEC established the customer protection rule (Rule 15c3-3) in 1972 and the uniform net capital rule (Rule 15c3-1) in 1975.

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