Goldwyn Capital
Before you transfer shares to any stock loan lender, check four things in writing: what the agreement lets the lender do with your shares, where the shares will sit and who controls that account, where the loan money comes from, and how the shares come back when you repay. Then look up the people behind the lender, and whoever introduced you, in public enforcement records. The checks below come from cases in which regulators said a lender sold borrowers’ shares and could not give them back.
Is a stock loan safe?
That depends mostly on the lender. In a non-recourse stock loan your shares generally move to the lender’s custody account for the life of the loan, and title can transfer, so getting them back depends on what the lender does with them and on the documents you signed.
FINRA set out the risk in a 2011 investor alert, Stock-Based Loan Programs: What Investors Need to Know (archived copy). When you pledge stock to these lenders, it said, “you generally transfer the stock to the lender, who then has total control over it,” and “some lenders sell the stock almost immediately.” It called the lenders “generally unregistered and unregulated” and told investors to “be extremely wary of borrowing from an entity that is neither a brokerage firm nor a bank.”
How stock loan scams have worked
Stock loan fraud cases brought by the SEC describe a common pattern. The lender sells the shares, often before it funds the loan, and pays the borrower out of the sale. Because the loan is for less than the shares are worth, the lender keeps the difference. It sets nothing aside to buy the shares back, so when a borrower repays, there is nothing to return.
In a 2008 case, the SEC alleged that One Equity Corporation and related Ohio companies took shares from 125 borrowers as collateral for “purported non-recourse loans,” generally sold all of the stock before funding each loan, and kept no cash reserves to buy it back. The court entered final judgments against the two owners in 2010.
The pattern is still around. In May 2026, federal prosecutors in Manhattan announced an indictment alleging that the operator of a sham stock-backed lending firm sold about $450 million of a borrower’s pledged shares soon after the transfer and funded the loan from the proceeds, after telling the borrower the shares would not be sold without a default. The charges are allegations, and the defendant is presumed innocent unless proven guilty.
What to check before you sign
Is every term in writing before any shares move?
Ask for a written term sheet, then the full loan documents, and read them before you transfer a single share. In the Argyll Investments case, the SEC’s complaint describes a “Loan Package” of a loan agreement, a pledge agreement, a promissory note and instructions for transferring the stock. Expect a set like that, with every fee written down. Once your shares are in someone else’s account, those documents are most of what you have.
What does the agreement let the lender do with your shares?
Read every verb in the clause that covers the collateral. In the Argyll case, filed in March 2012, the SEC alleged that the firm told at least nine corporate officers and directors their shares would not be sold unless they defaulted, then sold them before or soon after funding the loans. According to the complaint, the documents barred a sale before default but let the lender, “in its sole discretion,” lend the collateral, “pledge, encumber, hypothecate” it, or “commingle” it with its own assets.
Ask the lender to state in writing whether it may sell, lend or pledge your shares before a default, and ask your lawyer what each permission allows.
Press for detail if a lender says it will “hedge.” The SEC alleged that Argyll promised hedging and “simply sold the collateral outright.” In a 2013 case, it alleged that Alexander Capital Markets and a related company signed many loan agreements promising hedging or contracts that “would ensure that the portfolios could be returned,” while generally selling the shares on receipt. The court entered judgment for the SEC in 2021. Ask what the hedge is and whether it involves selling your shares.
Where will the shares sit, and who controls the account?
Get the name of the firm that will hold your shares, the name on the account, and who can give that firm instructions. The Argyll complaint said the two executives were the only signatories on the firm’s bank and brokerage accounts and controlled all of its trading. FINRA’s alert said that with unregistered lenders it is difficult “to verify what they are doing with your stock once you transfer it to them.” Ask whether you will receive anything during the loan showing your shares are still there.
Where does the loan money come from?
A lender that needs your shares to fund your loan has a reason to sell them. The SEC alleged that Argyll “had no independent source of funds other than the borrowers’ collateral.” In 2015 International Capital Group, a Chicago-area firm that presented itself as a stock-based lender, settled SEC charges over registration violations without admitting or denying the findings. The SEC’s order found it began selling collateral on average three days before funding each loan and, in many instances, paid customers only once enough stock had been sold.
FINRA’s alert suggests asking whether the lender has audited financial statements. Ask too whether the full loan amount is in place before your shares arrive. The One Equity complaint describes a borrower who received the loan in several installments, after repeated calls.
Who is behind the lender, and what is their record?
Get the full names of the lending firm and the people who run it, and look them up yourself. The One Equity complaint said borrowers were not told that one owner had “a long criminal history and numerous convictions for fraud related crimes.” In the 2026 case, prosecutors say the man behind the lender used a false name and falsely claimed ties to the Astor family.
Places to look:
- The SEC’s Action Lookup for individuals, which lists people once a judgment or order has been entered. It leaves out pending cases.
- SEC litigation releases, searchable by name.
- FINRA BrokerCheck, which also leads to the SEC’s adviser database.
- Your state securities regulator.
Investor.gov warns that asking for references is not enough, because “fraudsters have no incentive to set you straight.” Ask the lender how long it has been lending and how many borrowers have repaid and received their shares back.
What does the person who introduced you know?
FINRA’s alert said these programs may be marketed by financial planners, advisers, insurance agents, accountants and attorneys, and warned that when a professional promotes one, it “doesn’t mean that he or she” vetted the lender.
The SEC alleged that HedgeLender LLC, a Philadelphia stock loan broker, referred about 54 borrowers to One Equity for about $1.7 million in commissions while telling clients it had certified the program and vetted the people running it. Its principals “conducted minimal due diligence,” the SEC said, and adequate checking would have shown One Equity “had no funding source.” They consented to injunctions without admitting or denying the allegations, and the court entered final judgments in 2011.
Ask whoever introduced you what they checked about the lender and who pays them. That includes Goldwyn Capital.
How do the shares come back when you repay?
Find the clause on returning the shares. Argyll’s agreement promised them within 20 days of repayment, according to the SEC, and a One Equity borrower’s agreement said 30 days. In both cases the SEC alleged the shares had already been sold. Ask whether you get back the same shares, how many days the lender has, and what happens if it is late.
The SEC also alleged that Alexander Capital Markets accepted over $2 million in loan repayments from at least two borrowers and used the money to repay other borrowers and for its owner’s benefit. Ask your lawyer how to arrange the payoff so your money and your shares change hands together.
Has your own lawyer read everything?
Have a securities lawyer who works for you read the documents before you sign. A lawyer reviews the paper and cannot watch the lender’s account: the Argyll complaint says one executive told an attorney negotiating for a borrower that the firm would not sell the collateral shares. That is what the custody and funding checks above are for.
Officers and directors should involve company counsel as well, because insiders have their own filings and policies to check. Depending on how the loan is structured and where you live, transferring shares to a lender can be a reportable tax event, so talk to a tax adviser before signing.
Asking these questions of Goldwyn Capital’s lender
Goldwyn Capital introduces shareholders to an independent US family office that has made non-recourse stock loans since 2006 and funded more than $100MM. Goldwyn Capital does not lend. The lender makes the credit decision and funds the loan. Your shares move to its custody account for the life of the loan and are returned when you repay, and any fees are listed on the term sheet.
A family office is not a bank, so FINRA’s caution above is worth keeping in mind here too, and every check in this article applies. Indicative terms come back within one business day of a request, which leaves time to put these questions to the lender and to Goldwyn Capital in writing, and to have your lawyer read the answers before any shares move.
Common questions
Are non-recourse stock loans a scam?
The structure is not a scam in itself. FINRA’s alert said stock-based loan programs “could be attractive for some investors,” while warning about lenders that sell pledged stock and cannot return it. Whether a particular loan is sound depends on the lender and the documents. Our guide to the non-recourse stock loan explains how the structure works.
Can a stock loan lender sell my shares?
It depends on the agreement. FINRA said that in these programs the lender generally has “total control” over the stock once it is transferred, and the Argyll documents, as the SEC’s complaint describes them, let the lender lend, pledge or commingle shares even while barring a sale. In a non-recourse loan the lender’s only remedy after a default is the pledged stock, FINRA noted, so read what the agreement counts as a default.
Are stock loan lenders regulated?
FINRA’s alert described these lenders as “generally unregistered and unregulated” and suggested using BrokerCheck to see whether the lender and anyone promoting the loan is registered, and checking whether the lender is a regulated bank. Registration tells you who oversees a firm. It does not tell you what the lender will do with your shares.
Where can I find stock loan lender reviews?
Searches for stock loan reviews mostly return reviews of brokers’ fully paid securities lending programs, in which, as FINRA describes it, a clearing firm borrows a customer’s shares and lends them on for a fee. That is a different product. For a lender that will hold your shares, the useful record is official: the SEC’s lookup tool and litigation releases, BrokerCheck and your state securities regulator.
What should I do if a lender won’t return my shares?
Talk to a securities lawyer about your rights under the agreement. Investor.gov says that if you think you have encountered fraud, you can contact the SEC, FINRA or your state securities regulator to report it and get help.
