Bancorp International Group Inc (fka BCIT)

[CarltonH]

Do you seriously believe ANY brokerages pledged naked shorts in BCIT as collateral for anything at all?

During the period 1968 to 1971 it was not uncommon for broker-dealers to use customer securities and funds for their own business purposes.

The increased volume and inability or unwillingness of broker-dealers to keep prpper records of transactions resulted in significant record keeping problems.

There was a huge volume of "questioned trades" (uncompared trades), a breakdown in record keeping over the custody of securities their location in addition to significant and recurring accounting out-of-balance conditions and a large volume of fail contracts.


When failed firms were liquidated it was discovered that customers fully paid securities were pledged as collateral for bank loans and were liquidated by the lending banks to pay off the loans, customer free credit balances had been used to finance the broker-dealers' business, and customer securities could not be located.

You have to remember that was 40 odd years ago, but it does rather sound like that history is repeating itself.