Alright, come with me to Pretend-land and put on some pretenses for your amusement. Let’s say your some retail trader and you’ve got an account with the popular mobile game Robinhood or Etrade or something in the genre of ‘stock markets’ and ‘online gambling’ or ‘degenercy adjacent to pornography’. Point is, if you actually read the terms and conditions, when you buy shares in a company, you don’t actually own shares. This isn’t exclusive to the mobile games, this is actually applicable to virtually every broker.
You spend real money, to buy shares.
The Broker fulfills your order. Or atleast they tell you they did.
And instead of you getting real shares,
You get credited to your brokerage account an amount equal to the shares you should have. ‘Should’, key word.
So you aren’t a real owner, no. You’re a Full Bona-fide “Beneficial Owner”.
Sounds nice, but what does that mean?
The Semantics;
A Beneficial owner holds shares indirectly, through a bank or broker-dealer. Sometime an intermediary that acts as a ‘Custodian’ helps to manage these ‘equities’ for the ‘Benefit’ of the Beneficial Owner. Registering your name ‘beneficially’ and indirectly with a third party is also called “street name” or Street Name Registration. The majority of U.S investors ‘own’ their securities this way. Also known as ‘an entitlement holder‘ in the eyes of the SEC. Well aren’t you entitled.
A Registered owner or record holder holds shares directly with the company. The name of the registered owner is, you guessed it, registered with the Company and the applicable transfer agent(s). So Registered owner knows who the company is, and the company knows who the Registered Owners are (Instead of some weird obfuscated Brokerage system).
Here’s a table that spells out the differences between the two;
Also, as a side note, if you try to get a loan for a large amount and the Loan Originator ask what assets you have for collateral. You can’t list Beneficial ownership of shares as an asset. You can, however, list Registered Ownership of shares as an asset. You having shares in a brokerage account means jack shit for the calculations on loan and LTV and other bullshit banking terms. ~the more you know~.
Why is that a problem?
As a beneficial owner, you don’t actually own the thing that you thought you bought. Thought, you ‘bought’. Key words.
This applies to cash accounts and margin accounts. Basically any accounts dealing with a Broker that doesn’t ‘transfer’ ownership to you is making you a ‘Beneficial Owner’. Read the Terms and Condish. You’re buying a ticket to play a trial version of the stock market, not the real thing.
Depending on other terms and agreements, you might have signed up for things like a margin account or such, and that means that your Broker can lend out your shares. The Broker lends out your shares for money, and depending on your agreement, you might get some money. Might. kEy WeRd.
In most cases, you get no money, you don’t get informed, and the Broker lends out the thing you bought with your money to someone who could sell it short. If that someone borrows your shares, and sells it short, that negatively effects the price of your shares on the open market. Meaning your investment is going down, thanks to the actions of the Broker that you decided to do business with.
You’re unintentionally shooting yourself in the foot -financially- virtually every time you give brokers your money.
So your shares are now devalued. You bought something you don’t have, lost it, and now it’s worth less than what it once was. So when you go around to sell the thing you don’t have, you lose money. How does that make sense?
Typically Shares are lent out in Margin accounts and agreements. . . Typically. It’s not like you read the terms.
But as a Lawyer, Wes Christian points out, Even Cash Accounts have their shares lent out. Which is in Violation of SEC rule 15c3-3 requires brokerage firms to maintain secure accounts. Also known as the Customer Protection Rule. Just because it’s illegal doesn’t mean it isn’t happening. . . And if it’s happening, then there’s a financial incentive for it to happen and the people who do the risk and cost analysis (the underwriting) says that Crime does pay. . . Why else would someone do something in the money markets if it wasn’t to, idk, make money?
So even Cash Accounts aren’t safe from Brokers profiting from your shares.
Chances are, if the Brokers are using cash accounts to short (which some are and there’s evidence of such), then they’re probably using IRA and 401k accounts. No Account under a ‘custodian’ or ‘broker’ is safe. There really are No Safe Bets.
As a primer for simplification; the Continuous Net Settlement system (CNS) is basically a excel spreadsheet of who owns what shares and how many. This is used to help market participants locate, borrow, and move assets and equities. It’s practically a ledger where shares are pooled in ownership. And like any ledger related with accounting and finance, it’s likely cooked. How do you like your books? Medium-Rare? Well done? How about your pen? Pencil-Whipped, Gun-decking, or Blazing? Are we expecting guests, should we upgrade to RICO seating?
And before any real(ly)-fake shares be lent out, the shares credited are used to fulfill the locate requirements on short selling. So, in combination with the Continuous Net Settlement (CNS) system, Brokers could offer their batch of shares to a short seller to fulfill as ‘locates’ for a fee. The Brokers get money by saying they have ‘your’ shares, and are ready to lend em out. You, of course, don’t get informed or a paid (unless the terms and conditions say so, which chances are, not for locates).
The Broker wouldn’t technically have to lend out shares, until they have to deliver. And we know that typically doesn’t happen (the delivering part), and if it did, it wouldn’t be from a cash account, but from a pool of accounts under CNS. So the Broker gets plausible deniability to loan out your shit that they were supposed to, by SEC Rules, keep safe and secure. Because technically it’s not your shit, and the Broker is loaning out from their (CNS) inventory of shares, because your ‘shares’ are in that pool but you can’t reasonably prove they’re loaning out your shit.
It’s like investing a fat stack of cash to some Sole Proprietorship Entrepreneur, but that muther fucker sticks that investment money in his personal checking account. And then he goes to the strip clubs and spends his personal money on dumb shit. Technically, he spent his own money, and if he has money left, technically, he didn’t spend your money (or atleast not all of it). But any one with any business acumen would be reasonably like “What the Fuck”.
Arguably, because your account is credited the shares and those shares are in a beneficial ownership status- the Brokers aren’t lending ‘your’ shares, per se. They’re lending from their pool of shares in the CNS system.
So, Brokers sell locates on their pool of shares. Broker Profits. Push comes to shove, they loan some shares from their pool of shares to the people that ‘bought the locate package’ from the Broker. Broker Profits. None of it (the shares) is really ‘yours’, even if it was a cash account. Broker profits, you typically don’t get paid, and you’re none the wiser. It’s a beautiful thing.
So All accounts under a Broker could have shares lent out. . .
“The lack of transparency is deliberate. They say they aren’t loaning out your shares in cash accounts because:
-Random GME Ape
a) you don’t own shares, you own IOUs.
b) they know you can’t prove they are loaning your shares because they don’t have to report it. You have no evidence because they aren’t required to create the evidence.”
Sounds a teeny bit scammy? right?
Apparently, it’s an industry standard
Brokers aren’t your friends,
And typically a lot of brokers do this. Read the fine print. Nearly all brokers give IOU’s as shares for people’s real money that they buy. It’s just how the system bastardized itself. Blame it on evolution, de-evolution, or financial Degeneracy Denigrating itself to swindling.
That’s right, most people own stocks in their broker’s name, under a system called “street-name registration”. They’re beneficial owners. Brought to you by the glorious people that own nearly every equity on the US Stock Market, called Cede & Co.
Simply put, you’re trying to earn some bones at the Casino called Wall Street. Also known as the US Equities market. The Broker-dealers are the dealers at the table. The Chips are the shares, and the Casino (the house) is owned by Cede & Co.(along with a consortium of other businesses like the DTCC and such). The Brokers are in many cases, the dealers -they don’t always own your shares, typically they’re borrowing it from the Cede & Co. as well.
In truth, the ‘new’ system of how they account for share ownership is Net settlement held by Cede and Co under the DTCC. Stock brokerages don’t own anything and are operating out of a license to trade the shares of the DTCC under the kissed ring of the DTCC.
No one really owns shit except for the people who bought and registered their shares and took them OUT OF the DTCC. That’s using your real name, not your ‘street name’.
The DTCC holds all the real shares and when you buy with your broker, they send you an IOU in their internal accounting system (CNS).
Patrick Byrnes talked a bit explaining how this system works, it’s out there somewhere on the internet.
The Whole broker, market maker, clearinghouse network is a giant shell game shuffling around a bunch of IOU’s. The only thing real is your money that is getting sent through the ringer of rounds until you pull out dryer than bleached-white chicken.
So who owns what? Idk. Good question. That’s how this shell game works. In fact, if you don’t know who owns what, then that means the Shell Game is Working. Just. As. Intended.
Think of it light hiding money in an offshore account in foreign banks and through multiple business structures. Now you know how the IRS feels. All you have to do was invest in the Stock Market -and your money? It’s gone.
Not only are you missing out on money,
You’re also missing out on share rights.
On rights afforded to rightful share holders.
Things like voting or other benefits. Technically, you’re not the rightful owner of those shares. So it’s technically up to the Broker and the agreed upon terms on whether they want to pass on these ‘rights’ to you.
You’re a Bona-fide Star-Platinum ‘Beneficial’ owner, remember.
So you might get a vote for proxy information to vote in Corporate governance and matters regarding Corporate issues. But, I’ve written extensively on how the chances are, it’s rigged. Corporate Proxy Voting is a scam and being a beneficial owner makes it even worse because you’re potentially aiding and abetting scammers that rig these elections. You might be (unknowingly) lending out your shares to someone borrowing and voting against your interests. It’s that rigged.
Also, if you own shares in a beneficial name, and your broker loans it out. You aren’t insured those shares by the SIPC.
You’re only insured an equivalent value.
Which, going from $500,000 to $250,000 insured is a loss in value. You might not have that much money, and your money is probably stolen to do bank buy-ins (per Dodd Frank) depending on how or whom you invested with. Did you go through Brokers or Prime Brokers and Bankies?
A cool part of this is, your securities might be loaned out without you even knowing. So your SIPC protection might just reduce itself from $500,000 to $250,000.
Which doesn’t mean much to the brokies that never had nuffin anyways. But it means a lot for the small family funds and financial firms that actually route their purchases and business through the very same brokers.
Yea, so even small businesses, their invested portfolios, and arguably the small retirement plans, all of which are being funneled through these Brokers. The very ones that obviously have your back and obviously have your shares. (sarcasm).
The Broker’s strategy is;
The brokers will take your money and ‘pretend’ to buy shares that they already have. It’s like a timeshare for their inventory. If they don’t have enough, they’ll remain delta neutral by borrowing what they need, actually buying the shares themselves for themselves, or using some sort of contracts and combinations of swaps to act as collateral. This advanced form of ‘covering’ is more of Market Making and is a ‘privilege’ to only select Broker-Dealers. A lot can happen with the glorious Continuous Net Settlement system and even more can happen if the Broker uses an Omni Bus Arrangement for Share Inventory. You know, to further obscure things in the Shell Game.
So the Brokers take your money, ‘buy the share in your name’, not actually put the share in your name, and hope that you will sell for a loss. Statistically speaking, more than 90% of retail traders typically lose money in the first ninety or so days of trading. Maybe the markets are rigged like that, or maybe the house has the odds in their favor. Maybe both? It is a casino afterall.
And Brokers also make money for when they ‘route’ your trade. By route, I mean your order flow is sold off to the highest bidder that offers sweet juicy ‘rebates’. It’s like couponing but you’re the discounted item. What, Commissionless trades aren’t technically ‘free’ – you’re the product.
PFOF and more;
Sure, you’re a client. But the Broker also sells your data and info to their more high-preferred clients. High Preferred clients like -you know, the ones that pay your Broker millions for your trade data and the handling of trade routing? Yea, all to help ‘improve your price’ like a good liquidity fairy. All of this is in a scheme known as ‘payment for order flow’ or PFOF.
So the broker is basically taking your money, and often actively working against the very investment made by you. By traders. Because they have a conflict of interest between you, who pays them a meager amount, and a market maker that pays millions plus. A market maker that likely uses your data to sell to other people or trade against you, and in some cases, ahead of you.
I mean, these Trading Algorithms and High-Frequency Trading tech aren’t going to use themselves, you know?
It’s like poker, and your hand gets revealed to the broker and that info can be sold to other people who are also sitting at the table betting against you. The things you can do with your information, data, and even your buy and sell order history. So much manipulation available. For instance, you can create Psychological profiles or Temporal Profiles to analyze your trade patterns and open up positions to gank you the moment you make a ‘predictable’ trade.
Lmao, get fucked.
Also, your broker doesn’t technically have to buy you your shares. . .
You give money to a broker, broker is supposed to buy what you ordered. . . Supposed to.
You know when I say Brokers might not have your shares, I didn’t mean Just Lending them out.
Well, there’s some terms in the industry that allows things to be queued to ‘recycling’ status meaning that Brokers can take their time in buying those shares. You know, the ones that you paid for with your money that you gave the Brokers to buy on your Beneficial Behalf.
“Brokers have no time limit in which they are required to obtain the shares which their customers have purchased. This allows brokers to take your cash and they are not required to deliver shares. They can simply show your name in their ledger with a number of shares owed to you. As long as the net account balance of the broker keeps the DTC happy, there is no requirement to ensure that brokers own the shares that their customers have purchased. Sort of like FTX.”
-Rando Online stranger
Meaning the Broker might never have your shares.
Meaning that Brokers could essentially take your money and not buy anything. Meaning that your actions may not ever affect the market or price discovery. Meaning NBBO doesn’t mean shit and Lit Exchange’s price is fake as fuck.
This also implies that Brokers can ‘eat your buy orders’ and also your ‘Sell orders’ technically. Maybe none of your orders see the light of the open market or lit exchange, maybe they just get buried in a Dark Pool or some ATS?
Not only this, but if your order flow was sold in a PFOF scheme to another Market Maker, then that market maker could likely do the same. Manipulate the price action of a security, resulting in a loss and making you fearful into selling. You know, psychologically get you to sell at a loss.
That’s right, for the entire Stock Market. The Price is fake. If one buy or sell order doesn’t ever reach the market until someone wants it to and can be artificially held back, then the Price is fake. The Stock Market is rigged.
If you were to vote in any election and a single vote wasn’t counted or over counted. Then that election would be fraudulent. It’s the same thing here in the Markets, but you’re voting with cold hard cash. You know, like lobbying but you stand to gain money too. So if you care about Democracy, you should actually give a fuck about Markets too.
Here’s a discussion on OTC Gain-like functions;
Check out my articles on OTC gain example and OTC Gain in a Non CFD world for more information on how Brokers are making money from just making trades and setting up a collateral contract to hedge ‘your investment’. As if them taking your money wasn’t a hedge against your investment, lmao.
In OTC Gain, these brokers are literally betting against you.
“This is important because no matter the direction of the stock price, the Broker assumes zero risk on holding those assets; the investors that have purchased a right to those securities do. Prices going up or down is a non-issue for the Brokers/DTCC because they never paid for it; retail traders did.
Because the Broker assumes zero risk, there is an incentive to lend out as many securities as possible to earn the maximum yields without regard for price movement. This in turn, drives the price down of those securities due to that lack of incentives to stop their excessive lending practices AKA, Overselling.
Think about that for a moment. Can you imagine an unsuspecting trader paying you the full price for a security that you’ll own in your name/DTCC, giving you the ability to lend that security for profit and retain their profits irrespective of price movement? Win-win, am I right?
Have you ever wondered why so many retail traders lose money?”
-source
And it’s true that statistically, retail traders lose. I mentioned it before, I’ll mention it again;
And if you know anything about Classical economics, in order for someone to lose money, someone else has to win money. So if 90%ish of Retail traders are losing. Do you think the 10% of retail traders that wins are beating the other 90%?
Or is it institutions and the Market beating the 90% of retail traders?
It’s almost like the odds are stacked in favor of the house, the institutions that are there to -say- ‘make the market’. Lmao.
Besides, of course, the conflict of interest in trading against you- Sense you’re like a ‘customer’ or ‘client’ or something.
“Fuck the Clients”
The name of the game for Brokers is putting the money from your client’s pocket, into your pocket.
“So if you got a client who bought a stock at $8 and now it sits at $16 he’s all fucking happy. He wants to cash in ~and take his fuckin’ money and run home. You don’t let him do that. Because that would make it REAL.” -Quote above
“Revolutions- You follow? Keep the Clients on the Ferris Wheel and it goes, the park is open 24/7 365. Every decade, every God Damn Century. That’s it, the name of the Game. ” -Quote above
What do you do as a Broker? You keep the money in the market and make sure the only thing the client makes ‘REAL’ or “REALIZED” is a loss. Anytime the Client REALIZES a loss, someone else REALIZES a win. That someone else may or may not be you, or your market maker buddy and they might send you a kickback or a ‘rebate’ for helping make them some money. It’s a win-win as long as you don’t give a fuck about the client.
As they say;
“Fuck the Clients”
The Wolf of Wall Street is LITERALLY telling you what they do on Wall street. The reality is so obscure that you wouldn’t believe it, or that it would be only the ‘bad guys’ and scammers on wall street. You think it’s just a work of fiction because it’s cartoonishly evil. But the truth is in plain sight. Fleecing the ‘clients’ in favor of your ‘friends’ on Wall Street. And let me tell you, those ‘friends’ on Wall Street aren’t really friends, because they’ll sell each other out for a promotion to MD-assistant or some bullshit Back-office blowjob.
The General amount of people working in Finance don’t even know this shit, how rigged the Game is. That’s how convoluted this whole mess is. I mean, I don’t expect a police officer to understand how the Justice system is stacked and rigged to protect a certain class of people. You’d hope a police officer atleast knows the laws, but that’s also a tall ask in this society. So Naive Finance people believe in the 20th century values of ‘win-win’ trades of a bygone era, not knowing at all that this rigged game is not about helping their clients profit.
Getting a Brokers license is basically a License to Steal
I mean, have you read some of the terms and conditions for Hedge funds or other Fund managers? They always get a performance fee even if they lose your money. You win, they win. You lose, they still win. The only saving grace is, these people can’t piss off the really rich people with money, because then they run the risk of getting sued -or worse-. But of course, rich is relative and subjective, so don’t expect a billionaire fund to give too much of a shit about some millionaire nobodies.
Even Business Consultants are shit, they initiate contracts that they get paid on projected improvement of the business. So they’ll literally say that they’ll help your company out, then charge a fee based on their projections. If they project that they’ll make your business $25 more million, then they’ll charge you based on that $25 million. Even if you don’t make $25 million and instead are in the red for $10 million.
A Den of rats, thieves, and robbers. O’ beautiful Wall Street.
I wish I was joking, but this is actually the reality.
So, to recap some things,
We’re in a, how you say, a completely fraudulent system.
Basically any accounts dealing with a Broker that doesn’t ‘transfer’ ownership to you is making you a ‘Beneficial Owner’.
You’re unintentionally shooting yourself in the foot -financially- virtually every time you give brokers your money.
Even Cash Accounts aren’t safe from Brokers profiting from your shares. They’re probably using IRA and 401k accounts. No Account under a ‘custodian’ or ‘broker’ is safe.
All accounts under a Broker could have shares lent out. . .
Meaning you lose voting rights. There is no corporate governance, it’s an illusion.
Your securities might be loaned out without you even knowing. So your SIPC protection might just reduce itself.
Brokers might not even have your shares.
Broker might never have your shares.
These brokers are literally betting against you.
The Prices are Fake.
The Stock Market is a Scam.
And the emphasis on this article is, we got Brokers acting as Robber Barons. They take your money, tell you lies, and you lose at the end of the day. What a Beautiful Day. Just a typical Monday like any other on Wall Street.
I’ll say this time and time again, the realest cash crop are other human beings. Don’t get farmed.
Don’t sell yourself short, bud.
And remember, the Broker’s motto is basically;
“Fuck the Clients”
In Closing,
Am I an expert on the stock market? No. Am I an expert on bullshit and bullshitting? Yes.
As a scammer myself, I see scams and every baby boomer knows that the Stock Market is one big Racing Casino gambling papers and cooking books. It’s just uglier when you learn what’s under the hood. Even more uglier when you know what you’re looking at.
You spend real money and give it to a Broker to buy your shares.
Your Broker has a conflict of interest to work with other ‘customers’ to work against you.
Your Broker might not even have bought any shares. And the rules sort of also allow them to not have to.
Even if your broker bought any shares, you are a beneficial owner.
Those shares are never actually yours.
They’re just ‘beneficially yours’. Think of it like ‘Friends with benefits’ but you’re getting fucked.
So, Brokers never had your shares.
And Brokers Are Not Your Friends.
They do not have your back.
For more information to feed into this narrative, go ahead and read the post script below.
*Not Valid Financial, Legal, Life, or Any Advice
Post Script;
Here’s a bunch of other evidence to suggest Brokers aren’t your friends,
This tweet above sorts an annual report which states that the entire market may be a bunch of people leveraging and trading I.O.U’s.
So much so that approximately $100 trillion worth of shares bought with real money, might not actually have been used to buy ANY shares.
Meaning there’s a fuck ton of people owed and credited shares, but never really got em.
Chances are;
They never had your shares.
TDA handling GME split dividend;
There is good evidence to suggest TDA never had this person’s shares,
During the dividend, an agent for TDA made some statements that contradict the official Statements of GameStop regarding the issuance of a share dividend.
This agent literally said “Gamestop is incorrect”. As if Gamestop isn’t the company that dictates what they’re doing to their shares. Lmaooooo. “The statement is incorrect and I am not sure why they restated that.”
So, GameStop issued a share split via dividend, and the Exchanges and TDA and (not pictured) other brokers processed the Share Split as a regular Split. Instead of issuing real shares for a dividend, the exchanges and brokers processed a share split.
It’s highly possible that, based on the history of having over 140% and 227% short interest, these brokers don’t have enough shares to distribute via dividend. Almost like there’s a bunch of fake phantom shares out there. A bunch of fake counterfeit or phantom shares that inhabit the market, being traded around like a bunch of I.O.U.’s.
Almost like the Brokers never had your shares.
As a relevant read, the DTCC is complicit in this.
More proof retirement is a scam;
Here’s a chat log from one user to a Transfer Agent (Computer Share) talking about their shares in an IRA being transferred but still owned by the Custodian;
‘Beneficially in the custodians name’
Also, here’s the above mentioned AER Advisors Lawsuit with Fidelity. This Case never saw the light of Court, so these are allegations that got dismissed (and subsequent appeals were dismissed) because (among other things) the First Circuit Court said that Fidelity had Immunity under BCA based on Stoutt v. Banco.
So, these are the claims, take them as allegations rather than facts;
So Allegedly, Fidelity threw their so called ‘clients’ under the bus and left them to rot paying Financial Fees for Litigation and protection;
Say it with me: “Brokers Are Not Your Friends”
Did Fidelity do the above? Maybe, the court case didn’t make it to see discovery so the facts are unknown regarding the claim. That doesn’t mean there isn’t other facts that we can discuss.
Did Fidelity avoid court and hide through legal means like a rat? Yes. Is AER financially fucked? Yes. These two ‘yeses’ are opinions.
Would AER lie about not lending out shares in their claim to Court? No. Unless you’re a special kind of stupid. It’s very unlikely that they would lie about the base claim. So this is a possibility.
Is Fidelity still standing? Yes. Is the Client of Fidelity standing? No. These two are actual facts.
Do the math, sonny, the implication is there.
Who are you gonna trust on these markets? Some gambling Degen Wall Street firm? Be real.
Here’s another story;
“When my shares were in my Fidelity retirement accounts, there was an agreement with 3 parties.
I was the Beneficial Owner, and my shares were in street name, which meant Fidelity was the Custodian of my shares, and the Legal Owner was Cede and Co.
When I did an IRA Distribution In-Kind, the agreement was between two parties. I went from the Beneficial Owner, to the Legal Owner. I became a Registered Shareholder. This should be our end goal for every single share we own.
When you have 3 parties in the agreement, you are the lowest on the Totem pole, with the least amount of control of those shares.
Why, because you are not the Legal Owner. If you have a custodian, whether it be Fidelity or a self directed one, you are not the owner, you are the Beneficial owner, and Cede and Co is still the Legal Owner.
How can you guarantee you’ll receive a non cash dividend if you’re not the Legal Owner?
You want to be the King in this situation, but you are the Jester who believes he’s the King.
All I’m saying is find out if your the King or the Jester. Are you the Legal Owner or the Beneficial Owner?
If you’re title is anything other than Legal Owner, then you are not a Registered Shareholder.”
-Hank
So, this anecdote here, explains this person’ perspective on their retirement account having their shares lent out.
IRA shares held in Custodian are Beneficially owned.
Any Shares under CEDE & CO are subject to DTCC and the ilk’s lending programs
This whole Beneficial ownership is Financial Cuckery.
Like why would you do this to ‘your assets’. They’re not even your assets.
In the case where you are a beneficial owner, you don’t really own shit and aren’t protected by the SEC or even the full amount of the SIPC.
Imagine a three year old on the playground that gets tricked to buying a toy but everyone else gets to play with it and that three year old gets to say that they’re the owner but doesn’t get to play with it.
Welcome to the Stock Market.
Where,
Brokers Are Not Your Friends
Check Book control accounts;
If some one tries to sell you bad pussy by saying you have a Checkbook control account, that means you’re a beneficial owner.
They typically do this with IRA’s and other ‘retirement vehicles’.
“Self-directed IRA and Solo 401(k) plans that provide checkbook control put you directly in charge of all investment activities”
Yea, you’re directly in control of it alright. You spend your money, pretend to get a few shares, and someone else will loan it off of you.
Your Custodian isn’t even really helping you out. You’d think with that title ‘custodian’ that they’d have your back. Instead, they’re fucking you over. It’s a scam.
They sure are responsible for looking after your assets, they just don’t give a shit about you. If anything they’re responsible for making money off of your account.
A Discussion on FTRs gettin’ ratioed;
If you don’t know what an FTR is, the short and simple is that a buyer of a share never received their share. A Failure to Receive on one end and on the other is a FTD, a Failure to Deliver. This is all covered pretty well in the Naked Shorting Discussion.
Fail to Receive (FTR) is an event where the broker on the buy side of the transaction fails to receive the security from the broker on the sell side.
A Failure to Deliver (FTD) is the inability of a party to deliver a tradable asset, or meet a contractual obligation.
But here, we have another moment with Dr. Susanne Trimbath;
So the rate at which Retail investors receive no actual shares is 800 to 1500% hire than institutional investors. Meaning that institutional investors are more respected and preferential than retail investors. The Brokers take your money (debiting your account) and then don’t deliver your shares. . .
Almost like they never had your shares.
Essentially CSDA, a contract between parties that arranges settlement and fulfillment procedures, these contracts typically takes the cash even if the trade doesn’t go through or get fulfilled. If one side of the party can guarantee the trade, that side is fulfilled until both sides are fulfilled. But in some cases, one side just doesn’t fulfill their end, like Brokers simply not buying the shares they need. Yet the money is still debited because that was part of the requirement or contract in which the buyer needs in order to initiate the process. Unless, you’re like operating out of margin or something.
The quote by James Economides, shows that the Ratio of failed sales to failed purchases are 1:8 or 1:15. This means that for every one FTD, there is 8 FTRs. For every person selling a share, there is a chance that they don’t have a share to sell resulting in an FTD. For everyone buying shares, there is 800-1500% increased chance to never receive a share, resulting in an FTR.
The proper ratio should be around 1 to 1.1 as mentioned with regular ratio of sales to purchases. The fact that there are more FTRs means that there’s more people selling shit that they don’t have and not making good on it. There’s more fake sellers than there are fake deliverers. Which, doesn’t add up. It should be approximately 1 for 1. So it’s obvious that the market has inadequacies pointing to the existence of Naked Short Selling or Counterfeit shares or Phantom shares or Synthetics.
That means more brokers and market participants take your money and not deliver you a share. It’s like They never had your Shares. It’s also like they never intend to get those shares.
Dr. Trimbath here points to the failure and inadequacy of enforcing the current rules, stating that the whole thing is a mess and needs real reform and not some small wins or a few cases. She also references her book, Naked Short and Greedy, Part IX Unresolved Regulatory Crisis.
Auto Enroll Share lending programs,
Brokerages are pretty shit,
They are most definitely not your friend.
Like when International Brokers (IBKR) auto enrolls their clients;
Or like When Robinhood gave margin accounts to ALL their users.
Yea man, I don’t know how much more mounting evidence I need to give you to say that Brokers are basically scum, and that they are MOST DEFINITELY not your friend.
And of course, Robinhood says some dumb shit like ‘only borrowed money accounts have their shares lent. My nigga, you (Robbing hood) made all accounts AUTOMATICALLY MARGIN. For fuck sakes,
“. . .Only shares of customers who have borrowed from the brokerages to invest are loaned. . . ” -Robinhood, the same brokerage that makes all accounts Margin meaning that all accounts fall under the category of ‘borrowed from the brokerages’.
I shit you not, this is literally how stupid this shit is.
But because no one typically knows, or even knows to ask. They just keep stealing. Why would anyone expect their broker, custodian, and even the regulatory bodies to be scamming the public? It’s not natural to be cynical like me, I know, I’m built different.
These Brokers Are Not Your Friends.
Here’s some more on beneficial ownership;
You are an ‘entitlement holder’ and that means less protections and the SEC just doesn’t care about you.
you’re not a real investor, the SEC doesn’t see you as an investor. So you aren’t really protected by the SEC.
Yea, you’re just the marky mark or the shmuck that the real investors make money off of. You’re the fish, the game, the veggies being farmed.
And I say all of this above to remind you of,
They Never Had Your Shares
Even if they did, they’re not yours
And they’re making money off of YOUR MONEY
while giggling in their high-rises and yearly trip to the Bahamas
Brokers Are Not Your Friend.