Legislation was introduced in the 1990s that was marketed as a way to strengthen the financial system. Now, Glenn Beck warns that it can ruin your financial investments.
Although this law claimed to help, it was actually a way to bail out big financial institutions by allowing them to use your investments as collateral in the event of financial failure.
Each state made changes to Section 8 of the Uniform Commercial Code, a state law passed in all 50 states. This change means that an investment intermediary, such as Merrill Lynch or Fidelity, will hold the actual shares on your behalf. This change means that you, the buyer, no longer actually own the investment. This is done by a securities company or intermediary.
Glenn says it means “I hope it’s nothing.”
“But if you believe the banking system is weak. If you believe there will be a catastrophic black swan and big changes, that could mean losing everything,” he continues. “We take the insane promise of ‘you own nothing’ to a whole new level.”
This change will allow stockbrokers and other intermediaries who hold your investments to use them as collateral for their own financial contracts.
“Why this is dangerous is that if the broker goes bankrupt, the stock you think you own could be taken away by another major financial institution that owes money to the bankrupt broker. and your funds will be taken away to cover it,” Glenn explains.
While this law could be devastating to average Americans, some states are fighting back.
“The first state is fighting back on this right now, and that’s South Dakota,” Glenn said, “but we need more help.”
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