February 13, 2022
If liquidations are possible at any extent - I do not believe a liquidation of a defaulter net position is best. Opportunity here is benefit to the owners of our financial plumbing vs the interest of all retail active investors as well as passive retirement funds of the hardest working. If a defaulter has incurred debt above what is of a responsible of a fiduciary (if the system enables certain intermediaries to not be a fiduciary then that is a completely separate huge issue/ conflict of interest) they should incur the force of liquidation. Removing this Opportunity only makes the Fraud Triangle stronger and ensures firms do not over leverage their own assets nor the assets of others who are trusting them. If anything is hidden or not hidden in their terms and conditions that allow additional risk to be handed down to clients (cough or products as many of us are not the actually customer) this should be made illegal all together. FTDs should scare everyone and could take out the whole market. These should not be allowed at all, in basically all instances - this is ridiculous and uncalled for. Its 2022 Furthermore, if a borrower needs to re-borrow a security in order to deliver it, that means they did not have the security in the first place or sold it while still holding an open short. This should not be allowed as it presents a huge Opportunity for Fraud. Fraud Triangle - Opportunity, Pressure and Rationale, and we all know the later two are present at all times. Also firms should not be able to hide assets or liabilities on other books, with other firms, offshore, etc not be able to miss mark long vs short. This all provides an enormous Opportunity to commit fraud and do not believe that is the point. Thank you, please help to protect retail/the majority vs those who have power and can use the faulty systems in place to benefit themselves at the expense of others. - Concerned Retail Investor