March 30, 2022
If I am buying a security and my broker is lending it for short sale, I should be informed every time.
If shares are bought in a margin account, the broker is allowed to lend out the shares for short sales because that authority is always (or almost always) is included in the margin agreement. In the past, the lending clause was not routinely included in cash account agreements, but now for cash accounts with zero commissions this lending clause is now usually included in cash account agreements. Typically this agreement is more than 100 page and a normal person has no time to read and understand implications of each sentence. This is like my shares are being used against me.
This rule shall apply to insurance companies, foundations, and pension plans that lend their securities, but do not currently report to FINRA. These lenders are making profit by lending and buying more from the profit and lending again. An individual retailer has no chance to survive against current short selling practices and grossly blind SEC who has enabled these market players with one side rules and complex mechanism which even SEC have no clue.
Lending shares by large pension fund is against the fair game principle. Why someone will buy 100 shares and give it to someone to short it and loose the value unless you have malafide intentions to begin with. These large corrupt institutions are like hurricane who generate steam and become stronger and stronger every day and a hurricane only becomes weak when it the land. Similarly, these large institutions keep lending/buying an equity once they have enough shares or stomach is full. An average retailer will not be able survive in this market.