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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: lindend who wrote (62928)	6/22/1999 11:31:00 AM
From: Michael Bakunin	Read Replies (1) \| Respond to of 132070

Not an urban legend, a lie. There is no legal requirement to provide such interest, true, but that does not equate to a prohibition. Doesn't mean you should escalate; it means you should fire Schwab and hire someone who'll pay you a fair 'short rebate'. See tourolaw.edu See Rule 15c3-2, 17 C.F.R. § 240.15c3-2 (addressing broker obligations with respect to customer free credit balances); Norman P. Singer, SEC No-Action Letter, 1979 WL 14184 at *1 (July 12, 1979) ("Inasmuch as no NYSE or Commission rule prohibits or explicitly mandates the payment of interest on customer credit balances and monies generated from the lending of customer securities, the payment of such interest is a matter for negotiation between the customer and the broker-dealer.") -mb

To: lindend who wrote (62928)	6/22/1999 11:51:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Linden, Your Schwab broker's nose must be longer than a Spike Lee movie. <g> I receive interest all the time on short sales. There is no question that somebody gets the interest on the cash generated from the stocks you sell short. In the case of Schwab, they have simply decided to steal it all. They are not required to pay it. All such deals, including commissions, are negotiable. However, I do find it contemptible that they are negotiating by lying to you. They should just say, "you are not important enough for us to care about paying you a rebate." As I said in a letter to Barron's three years ago, getting a good short sale rebate is one of the toughest tasks there is for an individual. The best rebates tend to come from those firms with the largest vaults of stocks: Merrill Lynch and DLJ. Aufhauser, before it became Ameritrade, used to clear DLJ and they paid the best rebate of the discounters. Unfortunately, that disappeared when Ameritrade was formed.