Rehypothecation, Or Theft ???

Rehypothecation is a professional financial market practice, where counterparty reuses a security pledged as a collateral for its own use. It is how the hypothecation mechanism fundamentally works in the security market, replacing the overhead of liens through actual title transfer against cash with the promise of an opposite transaction in the future (repo). Counterparties receiving the security can use it freely.

http://en.wikipedia.org/wiki/Hypothecation

Here are two examples of what it can lead to:

If MF Global moved their US client assets to their UK subsidiary (added: moved legally with client approval), and then followed the UK rules on rehypothecated assets - the client money is gone and nothing illegal happened. That would be the worst possible outcome.

http://www.calculatedriskblog.com/2011/12/mf-global-and-rehypothecation.html

and

http://www.zerohedge.com/news/2014-06-04/china-scrambling-after-discovering-thousands-tons-rehypothecated-copper-aluminum-mis

By the way, most of the gold stored in "secure" vaults in the United States has been rehypothecated to parts unknown.

I don't know about you, but to me this appears to be theft by another name.

Are your assets subject to this? I bet they are and you don't know it.