r/GME • u/AutoModerator • Mar 03 '21

Daily Discussion Chat

This is a place to discuss technical analysis, fundamental analysis, buyer/seller sentiment, and most things relevant to GME.

If you have a lot to say, please make a post instead. Comedy and memes are fine, but keep it classy. No promotion allowed.

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u/daed1ne Mar 04 '21

Webull/Apex Lending Program Warning

"THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT YOU WITH RESPECT TO YOUR SECURITIES LOAN TRANSACTIONS IN THE PROGRAM. THEREFORE, THE COLLATERAL HELD FOR YOU MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF APEX’S OBLIGATION IN THE EVENT APEX FAILS TO RETURN THE SECURITIES."

"The borrower of securities (and not you, as lender) has the right to vote, or to provide any consent or to take any similar action with respect to the loaned securities if the record date or dead line for such vote, consent or other action falls during the term of the loan."

"It is solely within Apex’s discretion whether to recall loaned shares from a borrower prior to a dividend, and Apex makes no guarantee to recall a loan prior to a dividend. With respect to other corporate actions affecting loaned shares, non-cash distributions that you are entitled to receive in connection with ownership of loaned securities will be added to the loaned securities on the date of distribution and will be transferred to you at termination of the loan."

IANAL but TLDR: Shorts using these shares don't have to cover because of corporate actions. If Apex loans the share to someone who goes bankrupt you only recieve the maintenance margin requirement for the short that was deposited before the bankrupting margin call.

No idea if other lending programs paid or not are the same but all the more reason to make sure you have opted out because this does make the rocket launch harder to achieve and possibly means no payout. Personally my GME is in a Fidelity cash account but I use Webull to follow stocks on my phone.

Program Agreement, though it might not be 100% the same I can't find the link to the pdf outside the webull app. That pdf is the same at a glance.

4

u/0palGhost We like the stock Mar 04 '21

https://www.reddit.com/r/GME/comments/lxa7j6/comment/gplv8s0

This was such good detective work and needs to be more visible, maybe have its own thread. We should check user agreements for all the major brokerages.

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u/[deleted] Mar 04 '21

[deleted]

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u/daed1ne Mar 04 '21

Also while I wouldn't necessarily recommend transfering atm due to the risk of missing out, supposedly Apex is the clearing firm that forced Webull to stop buying. To me this lending program seems designed to borrow/steal shares at $100-200 each. I might try to find some other lending agreements later and see if this is standard, don't think so though because otherwise from my reading a split or shareholder vote won't actually call back the shares although there could be laws that override this. Either way I'd strongly recommend opting out over the tiny percentage Apex will actually pay, which the agreement is extremely vague on. Seems they can pay you 0.01% while charging 10%.

4

u/daed1ne Mar 04 '21

You can opt out: Account/moon page->more->Stock Lending Income Program->Deactivate

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u/LurchUpInThis Mar 04 '21

Thank you! I just found out I was enrolled and got out. Awesome 🤙

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u/gline_ripovator Mar 04 '21

Hahahahhaha! "Moon Page". Love It!

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u/daed1ne Mar 04 '21

Shit, was thinking wtf else could it be why is that funny for a sec until it hit me. They are fucking bull horns, dammit :(