“The details of the bankruptcy eventually exposed that the company engaged in excessive leverage as well as various fraudulent maneuvers. Nonetheless, the practice known as rehypothecation was at the heart of the broker’s demise… and it was and still is legal.  A groundswell of concern surfaced and left investors to question not just the soundness of their personal broker, but the regulations that underpin the entire industry.  Heightened liquidity and leverage risks are the new normal for today’s investor. These risks also apply to brokerage firms. The good news is that a way around these uncertainties is available to every investor: the Direct Registration System (DRS).”

http://www.internationalman.com/articles/the-drs-going-direct

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