An Comprehensive Industry Report on the Rampant Practice of Pledging Client Securities as Collateral, Exposing ALL Investors to Risk of Loss.
The financial services industry has been secretly using all client’s stocks and bonds as collateral, for their own gain, without informing or compensating their clients. This now widespread industry practice was legalized through progressive changes made to the UCC and bankruptcy law that legally shields the derivatives industry from client claims in the event of bankruptcy. Permitted by law, this surreptitious use of all investor’s assets has produced a derivatives bubble that places all investors at risk of loss. The secured creditors of the derivatives contracts have legal priority ahead of the client securities. This unrealized risk is the subject of this report.
The current infrastructure of the global securities market allows the world’s largest financial institutions to freely pledge their client’s securities as collateral for their own gain. While an open secret at the very highest levels of the financial system, this widespread industry practice has gone unnoticed by even the most sophisticated institutional investors.
All Investor’s Securities are Secretly being Pledged as Collateral by their Brokers & Firms Above them.
This technical report is the first comprehensive legal exposition of this widely unknown but systemically pervasive issue. It provides economic analysis of its impact on all investments in the financial markets. Enumerated are the relevant changes in law that undermined property rights to financial securities and the specific legal risks to which all investors are consequently exposed.
Changes in Law Permitting Free Use of Everyone’s Securities as Collateral Created a Bubble in the Derivatives Market that Exposes All Investors to Risk of Loss When it Collapses
Published by investigator and economist James Patrick—with guidance from former hedge-fund manager David Webb—The Great Taking Report picks up where Webb’s groundbreaking book leaves off and serves as a guide to the largest financial fraud story in known history.
The report has three components:
Legal – It provides a comprehensive timeline of the relevant laws, codes, and financial regulations enacted over the last 30 years, on the local, national, and international level, within the United States and the European Union, that enabled this practice.
Economic – An analysis of the economic consequences caused by the use of client assets as collateral, particularly the alarming expansion of the global derivatives market. The report critiques the clearing infrastructure of the global derivatives market enacted following the 2008 crisis, and the inherent heightened risk of systemic failure it produces.
Market – A review of possible scenarios that could unfold, based on the planning of the world’s financial regulatory authorities (the Trilateral Principal Level Exercises); an evaluation of how investors can navigate in such a precarious legal environment with deceptive regulations and a market infrastructure that grants privileges to the world’s largest banks.
This report is not for the average retail buyer of stocks and bonds. It is designed for the sophisticated, intelligent investor who wants a thorough documentation of the systemic risks of the current indirect holding system of securities.
DISCLAIMER: The Great Taking Report is the work of James Patrick. David Webb has helped James with the Report but receives no financial benefit form the Report