Replies to post #15782 on Sphere 3D Corp. (ANY)

[Jeff12406]

Been informed that doesn't matter....as long as your shares are in a margin account, high ask order or not, they can be lent out. Only shares in a cash account would accomplish that.

[ariadndndough]

getting to the bottom of this with scottrade

been on the phone for hour now escalating the concern up the chain of command.

not getting off til i have answer.

will report later

doug

[GetSmart17]

I have accounts at RBC and have offerd for sale a large protion of my shares in my margin account at $20.00. Going to interesting going ahead from here. Have a great day. IMO

[JB3729]

My thoughts on protecting shares from being lent to the shorts -

My accounts are at Fidelity and I know that they will not lend shares to shorts without signed permission from the account holder. Why the signature? From Fidelity's securities lending program -

Please note that the fully paid securities on loan are not covered under the provisions of the Securities Investor Protection Act of 1970. (bold and underline by Fidelity)

I can't fathom how other U.S. brokers could lend out shares that they do not own, without permission, when the act of lending nullifies the insurance on the value of those shares.

At Fidelity; if an account holder agrees to loan shares to Fidelity (who then loans the shares to the shorts), Fidelity opens an escrow account at Wells Fargo in the name of the account holder. Fidelity adjusts the amount of the collateral deposited in the Wells Fargo account daily to match the days market closing value of the loaned shares. This is done to protect the account holder due to the loss of coverage by the SIPA.

Am I talking about lending from a margin account? Yes. A little more from the 18 page MSLA Fidelity sent me -

You must execute a Master Securities Lending Agreement (MSLA) with Fidelity. The MSLA discusses the rights of all counterparties and governs all of the loan transactions. It is a separate agreement from any previously executed margin agreement.

Only securities that have been fully paid for or are in excess of any margin debt are eligible.

It would be interesting, and possibly worthwhile, if everyone called their broker and asked what their policy is. You might say something like -

I've heard (or I've read) that securities on loan from my account are not covered under the provisions of the Securities Investor Protection Act of 1970. Do you execute a Master Securities Lending Agreement with me before borrowing shares held in my account.