| Example 9: Able & Co. carries its principal inventory of |
securities through Clearing Corporation, which offers a "shared |
control" facility whereby a participant securities firm can enter |
into an arrangement with a lender under which the securities firm |
will retain the power to trade and otherwise direct dispositions |
of securities carried in its account, but Clearing Corporation |
agrees that, at any time the lender so directs, Clearing |
Corporation will transfer any securities from the firm's account |
to the lender's account or otherwise dispose of them as directed |
by the lender. Able enters into financing arrangements with two |
lenders, Alpha and Beta, each of which obtains such a control |
agreement from Clearing Corporation. The agreement with each |
lender provides that Able will designate specific securities as |
collateral on lists provided to the lender on a daily or other |
periodic basis, and that it will not pledge the same securities |
to different lenders. Upon Able's insolvency, it is discovered |
that Able has listed the same securities on the collateral lists |
provided to both Alpha and Beta. Both Alpha and Beta have |
control over the disputed securities. Paragraph (2) [Maine cite |