Improper Use of Customer Securities or Funds

What this video covers

• Why the borrowing prohibition is a two-way street: brokers cannot borrow from OR lend to customers
• How indirect arrangements through family members still violate the borrowing rule
• The five exceptions (immediate family, financial institution customer, preexisting personal relationship, preexisting business relationship, registered person at same firm) and why almost all require prior written firm approval
• Why "preexisting" means before the broker-customer relationship began, not after
• The proportionate sharing default for customer account profits and the single exception for immediate family members
• Why both customer written authorization AND firm written authorization are required for profit sharing, never just one
• What segregation means and why using customer securities as firm collateral is a career-ending violation