OK, thanks, Eric. I get your meaning now.
Trying to think this through though.........
L= the guy who lent me his shares
B = me, borrower of shares
N = new guy who sells the shares I buy to cover (N could be L)
Reading from their website, I believe that CNS clears most all trades on NYSE, ASE and NASDAQ.
Now, if we assume (an assumption that needs investigating) that CNS is the clearinghouse for L,B and N, then CNS knows all about what will happen three days from now. Therefore, they could notify the borrower.
However, maybe it happened that L moved his shares from his margin account to his cash account. Does this require a settlement period? I dunno......
I've got a fax in to a guy at NSCC. I'm hoping for answers.
Eric, you said, "I am now familiar with how brokers usually handle this type of situation and what recourse they may have to protect their customers (like you)"
How can I become familiar with this? How did you become familiar?
Thanks so much, Peter |
