Hedgelender, Daniel Stafford, Fred Wahler, Robert Schneiderman, William F. Oshea III, ESQ They used up much of my time telling me how wonderful they were.... Philadelphia Pennsylvania

William Dean Chapman, former president of Alexander Capital Markets, admitted in federal court documents prior to criminal sentencing that he intentionally withheld the fact that he was not hedging client portfolios from his brokers and clients, including HedgeLender LLC and its principals noted in this listing, in order to keep new clients coming and to save his floundering firm.

Chapman found himself unable to return portfolios for clients who were sourced by well-meaning brokers, who had been repeatedly told in writing and verbally that "every portfolio was hedged" against loss. In truth, Chapman ceased hedging at one point and did not disclose this fact to his brokers for the sole purpose of continuing to obtain new clients for his failing company. This put his brokers in the unfortunate position of unknowingly aiding a risky financing scheme that was not in the best interests of their clients.

These brokers - particularly HedgeLender - paid a heavy price in fines and were forced out of buisness as a result of the concerted pattern of deceptions that were revealed in the federal case against Chapman, who is now serving 12 years in federal pentitentary for his actions. HedgeLender and its principals were recently exonerated as a result of these closely held revelations and testimony by Chapman (locked down in Grand Jury), which did not come out publicly until December of 2013.

Some of the former HedgeLender brokers and several other brokers who sent clients to Alexander have considered filing suit to remove fines that were imposed on them as a result of the Alexander/Chapman's fraudulent and self-serving revelations, but have chosen not to do so and instead now work to alert future brokers of the dangers of relying on a lending institution's documents and "guarantees" before sending clients to their program and marketing it.

The only legitimate stock-based loan is one where the client never transfers title or ownership of the securities prior to funding; where the lender is an SIPC/FINRA/ member and their banking operations FDIC; where the advisors at the licensed instituion are themselves licensed and FINRA members in good standing; and where the client's account is their own account and only their account, never sold to fund the loans.

Any other program should be avoided and the HedgeLender experience should stand as a powerful lesson to all brokers for all types of financing; total verification and audited financials MUST be available from a full licensed lender before considering sending your clients into the program. No other course properly serves one's clients.

The individual who slandered me above with his incorrect Consumer Report is an individual who is brokering loans and closely involved with an internet firm (put "stock loan" into Google to find them) that requires clients to transfer title of their securities to an unlicensed third-party who has the right to sell those shares and in fact will, in every case at some point. Selling of your assets, your securities, are part of the overall funding of the "loan."

It is true that I am the former president of HedgeLender LLC, a fact that I do not deny. (Please see my post at www.hedgelender.com/hedglender llc for my full views). HedgeLender was without a doubt the most successful stock loan marketing firm in our industry at our zenith, with over 2,000 affiliates - a major reason why we received the attention of Forbes, Business Week, and many other top publications when our fortunes failed. And it was a story worth printing: We enjoyed an excellent reputation and were known for untiring customer attention and service, strict rules governing our affiliate's qualifications, and always going to bat for our clients on any issue whenever it occurred. We coined the term "HedgeLoan" that was starting to be used on Wall Street at the time, and though we were never a lender nor held ourselves out as one, we believed at all times that our lenders' programs were sound and served the interests of our clients well based on the data and representations of those lenders.

However, we had trusted our lenders to be fully honest with us. We had always thought it was in their interest as well as ours to do so. Our lenders represented themselves, variously as hedging their portfolios, as a women-owned small business with the highest ethics standards, and as financially healthy. They stated in writing and in person that they were not selling their shares to fund their loans. None of these statements is not conjecture: Documents have been and were filed with both the SEC and IRS by HedgeLender fully supporting all of these statements, which is why no member of HedgeLender was ever declared guilty of any intentional wrongdoing, despite what one may assume reading the over-inflated hyperbole that is standard IRS and SEC for all cases they investigate.

In fact, the SEC's documents themselves recognized that HedgeLender was not a lender and its tireless service to its clients, and clearly recognized that it was victimized by lenders who did not disclose the facts about their programs, repeatedly. Lender nondisclosure and untruthfulness was a very sensible policy towards HedgeLender and other brokers if the goal was to keep a steady stream of new loan clients coming through the front door, and that is precisely why they did what they did.

We do not deny that our lenders mismanaged and misrepresented the health of their financing or the methods they used or the features of their programs ("no capital gains taxes unless client defaults", we were told by one lender, who swore that every portfolio was hedged against loss as HedgeLender demanded, when in fact not all of them were) or that we repeated these descriptions in our marketing literature. Yes, our trust was misplaced, and we do not deny this in the least.

The law says that even if a lender goes out of his way to hide or disguise their weaknesses, the broker or marketer has a duty to the public to perform enough due diligence to know this. We accept this, and that is why we settled with the government rather than fight them as we very well could have (and as our attorney, a former SEC lawyer, recommended) in a court of law. We believe that the public deserves to have exactly what a broker or lending company offers, not something else, and that it is the duty of any broker or marketer -- to be absolutely accurate. But we also recognize that when a lender has gone of out his/her way to obscure, hide, or distort the facts surrounding their lending program, even to the point of delivering written assertions that are untrue, that the broker/marketer is at the mercy of that lender.

HedgeLender was just such a company. We aimed to deliver qualify financing to our clients, worked hard to create the best affiliate force in the business (which we did), but trusted out lenders to represent their companies and their programs honesty, which they did not. We paid the price for that trust. It was a lesson that neither I nor the dedicated staff who worked for me ever thought we had to learn, but we did - the hard way.

Today I understand this industry with one of the most accurate perspectives that any individual could possibly have. I understand the extreme dangers of putting your securities in the title of an unregulated, unknown third-party nonrecourse stock loan "lender" who has no independently audited financial resources to back up their funding program. I have seen first-hand what I did not know at the time -- that virtually all of the client's shares are sold, quickly, to fund or support the funding of the client's "loan" and that the "lender" pockets the difference between the sale price and the client's "loan".

I saw how innocent clients were lured into transferring title to their securities with small print in the "loan" contracts -- using cute phrases designed to disguise the truth, such as "the right to sell or sell short" buried deep in the small print of the loan contract so the unwitting stock loan borrower wouldn't guess that he's about to lose his shares.

I saw the ridiculous phrase "beneficial ownership" and the untrue statement, "No short selling" (a phrase they use because they say that, selling the shares over-3-4 days instead of in 1 day is not technically "short"). No nonrecourse, transfer-of-title stock loan client retains ANY ownership of any kind. The piece of paper they receive back that says they are "beneficial owners" is practically worthless -- given that the company sells the shares and has not public financial statements to verify their health.

That is why today I am a firm crusader against ALL forms of stock-secured lending that involves nonrecourse stock loans or transfer of the client's title to a third-party. These types of loans are extraordinarily risky, as HedgeLender had to learn the hard way. I cannot undo the trust I placed in my lenders in the past, but I am dedicated now to steering potential securities-based loan clients firmly away from such programs, which even the respected institution FINRA has warned, are very dangerous and should be avoided at all costs. (See http://www.finra.org/Newsroom/NewsReleases/2011/P123732 for the Financial Industry Regulatory Authority's strict warning against nonrecourse, transfer-of-title stock loans).

The writer of this post is a person known to me who follows me and my actions around the net because I am having a strong impact on the transfer-of-title stock loan business with my attacks on their programs. Though I cannot name this person here for legal reasons, the person is continuing to ask unwary investors to transfer their title into another's name, where the stocks will ultimately be sold.

When sold in this way, the borrower must now put their entire faith in the unregulated lender with no proven, audited financial statements, to return their shares if they repay their loan. Many do not, particularly when the value of the portfolio goes up, because even when the client pays off the loan it is usually not enough for the "lender" to go back into the market to buy up the shares they need to return to the client. The unwitting client is putting their assets and their financial future in the hands of people who do not have their assets any more.

HedgeLender collapsed when it's lenders had people repay their loans when their stocks had gone up in value. The lenders could not find enough cash to buy up the stocks to return. They delayed. One of them went bankrupt and was shut down. Clients had to wait months to regain their shares, which as mortifying to me personally and to our hard-working staff as well, which had been assured repeatedly by these lenders of their financial health on the phone, in writing, and in person.

This is the same fate that awaits people who put their faith n the kind of programs that the writer above supports.

Today I work as a Sr Consultant for A. B. Nicholas a company owned by investors who understand that the ONLY valid securities-based loan in 2012 is one in which 1) the client's shares never change title, but remain in the client's full, real, ownership at all times; 2) where the shares reside in an SIPC-insured account at a fully regulated, U.S. top-tier brokerage and banking institution, never sold to fund the loan as with nonrecourse stock "loan" firms; 3) Where every lender staff advisor is fully licensed and a FINRA member in good standing; 4) Where clients can repay principal, and can repay their credit at any time without penalty; 5) Where every cash account is FDIC insured and 6) Where the institution is public, with full, third-party audited financials available on demand, and full compliant financing and regulatory structures, online access, and many other features that EVERY stock loan client should demand.

That's who I am in 2012, not the caricature that this "anonymous" detractor (we know who he is) tries to put forth. I regret my naivete of the past, but today I am committed to the end of nonrecourse stock loans and will cooperate and support any individual or institution wishing to join this fight. I work only with ABN, receive not a penny of funds from any lender, and unlike the ridiculous poster, would never come close to a nonrecourse stock loan at any price. I urge any reader of this post do to likewise.

Finally, let me make clear that the IRS and SEC settlements I agreed to, which neither admit nor deny any of the allegations, clearly prohibit any involvement in those stock loans having the characteristics of a nonrecourse, transfer-of-title securities loan. This is an easy requirement to comply with, since I would have had nothing to do with nonrecourse, transfer-of-title stock loans EVEN IF the settlements did not require me to do so. I am thankful for that prohibition; I only wish that the entire industry had the same prohibition on it, because there is absolutely no form of securities finance more risky than a nonrecourse stock loan.

The original post in this thread, by the way, was also posted (in my opinion) by a competitor selling transfer-of-title stock loans. The difference is that his post was in 2009, and is understandable despite it's many exaggerations and self-serving distortions. The latter poster is simply trying to discredit A. B Nicholas for purely competitive reasons. ABN's program is without question absolutely the safest, most secure and regulated program of its kind, a smart alternative to the transfer-of-title financing that has gotten so many borrowers letters from the IRS asking them to refile their stock loans as taxable sales instead of loans.

Thank you.

- Daniel W. Stafford

Please note that Dan Stafford is operating under a new business, A B Nicholas and is offering stock loans (possibly including non-recourse loans which is he prohibited from offering in accordance with his DOJ/IRS settlement).

The following legal cases were brought against HedgeLender, LLC & Daniel Stafford by the SEC in 2009 and the IRS/Dept. of Justice in 2010.

http://www.sec.gov/litigation/litreleases/2009/lr21234.htm

http://www.justice.gov/opa/pr/2010/September/10-tax-1063.html

Also effective some time in 2009 or 2010, HedgeLender LLC ceased operations as a stock loan broker.

Our verification and security systems are today the best in the industry bar none. The loans we facilitate are institutional - through SIPC-member institutions only, and have been for some time now - to meet the higher standards demanded of all financial firms today. We remain the top firm in our market space.

Since the individual who wrote this refuses to reveal himself, I cannot tell you if this is just a person writing for a competitor company or the competitor himself, but I can tell you that my company has consistently and tirelessly worked to deliver the most flexible securities-backed financing services in the industry to clients for over a decade, and will continue doing so. Where we saw a need to change or improve, we have done so. We have many satisfied clients and over 400 affiliates who prefer the personalized service and institutional, stay-in-your-name-and-account financing programs that we facilitate, and we are very proud of that record.

The lender he refers to was but one of several we referred clients to, for a very brief time, and my company has not referred a client to this individual in over two years. We have settled all issues regarding these referrals without admitting or denying wrongoing, and have moved on stronger and wiser.

We do not mind competing with any other financial firm. We do, however, reject the statements in this as overbroad and almost certainly the result of someone who was rejected for a loan or who has been encouraged to write this for the benefit of a competitor. I would ask the reader to take that into consideration before drawing any conclusions.