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This report documents how the financial services industry has been utilizing securities worldwide as collateral many times over in rehypothecated collateral chains. Financial securities are housed in “dematerialized” pooled and fungible form—in the United States at the Deposit Trust Clearing Corporation, and in the European Union at Euroclear of Belgium—in what is termed the “indirect holding system.” From these central securities depositories, all financial securities are being utilized as collateral by the largest banks, free of payment and without the widespread knowledge of individual clients and institutional funds. This unrestricted use of clients’ assets as collateral began in the 1970s with the establishment of the central securities depositories. It became a widespread industry practice in the 1980s, and is now referred to as “collateral management.” The securities clients, both individual and institutional, are now utilized in a globally automated fashion many times over in “collateral chains.” In this paper, we examine the economic implications of this practice. Moreover, we outline and critique the legal structures enacted to legally formalize this practice in the United States through the 1994 revision of Article 8 of the Uniform Commercial Code and the Central Securities Depository Regulations in the EU in the 2000s. Finally, we explicate the resultant explosion of the derivatives market following the legal formalization of this industry practice. This paper concludes with legal recommendations for the restoration of property rights to securities worldwide, as well as predictions of the economic implications if those property rights are not restored.