Brokers give lip service to the cash account rule - but in reality there is nothing to stop them. I had a nice block of shares DWAC'd into IB non-margin account after discussing the stock and its situation with account executives then they say I can't sell it for a year, and in about 10 months it's oops, now it's two years. The person in charge of transfers at Continental (very reputable firm) had to intervene to get my shares back. He totally agreed with me that they took them in just to loan them out.
I repeat - there is nothing in place to stop your broker from loaning out shares in a cash account.
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