Equity First Holdings

Equity First sells securities of its customers to funds loans

It is not unlikely to find financial institutions involved in some kinds of ponzi scheme and scandals . Equity First Holdings is also doing the same scandal with its customers. The company is making false promises to its customers and making them suffer because of their fraud.

As per the company’s claim, the company provides ‘stock loan’. However, it is similar to Derivium which is under many lawsuits for selling customer’s securities. Equity Holding is also under one similar lawsuit. I know about one and not sure if there are other as well.

The company sells a part or the entire securities of customer and once the customer pay back the entire loan, it purchases the securities from the market and give it back to the customer. It does this to fund its loan which is not legal way of operation.

It promises things that are not true and fools its customer for paying interest on their loan which they anyway make by keeping the difference of the securities that they sell and but back.

There are no financial statements and audited cash reserves of Equity First Holdings. I am not sure why SEC has not taken any action against them and have shut them out. This company is taking huge advantage of that leverage and have been scamming people since the day it came to operation.

There was a client of theirs, who could not get his securities back because the company could no but that back from the market. He tried a lot to fight with them and made complaints to their office as well. But, it was not sorted.

It is not the only case. There are hundreds of cases registered against them and they are not taking any action to correct their mistakes. Its sad that I could not find anything sort of negative information against them, otherwise I would not have dealt with them.

Whatever they promised to me, was nothing but lies. They can go any far in making profit. You cannot stay calm about your securities after handing over to them, because it will anyway be misused. If you are lucky, they will get it back from the market or it would be lost forever.

I would suggest asking for proof of financial health before you deal with any financial institution. Also, try to search for those institutions that are regulated and licensed. It will help you stay safe.

I was not aware of these things and was trapped into the fake promises of Equity First Holdings. That is the reason, I am posting this report here. I could not do much for the fraud that they did to me, but would like others to know beforehand about the mess they are.

It would be the worst decision to hand over your securities to them. They are not stock loan provider, but scammers and are making use of malpractices for serving its clients. They would soon meet their fate.


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2 reviews on Equity First Holdings


    I have been quacked by their managers… Lost most of part of my important things.

    Be aware to deal with Equity First Holdings as its a big HOAX

  2. A true Ponzi Scheme


    This response is based on my dealings with most stock lenders in the industry. This is factual information based on real transactions completed.

    Throughout the history of the stock market it is very common to find financial institutions involved in some kind of stock market related scandal, fraud or Ponzi scheme. Quite often, it is the institutions and people we trust that hurt us the most.

    One of the largest and widely spread financial frauds has proceeded unnoticed and unregulated by the financial authorities for many years. With promises to borrowers that are never kept and manipulative market activities that have eluded government agencies, the deception to the public has grown to enormous size.

    The industry, commonly referred to as Stock Loans, Share Loans, Equity Based Lending, Alternative Lending, Alternative Financing, Asset Backed Lending, and Collateralized loans has become one of the largest deceptions against stock market shareholders in the history of financial products. How could this happen? Through the deceptive promises of the companies that call themselves “Lenders,” and the misleading contracts and marketing material they use to convince shareholders that their shares will be safe in their possession.

    The stock lending industry is not new, and can be traced back to its similarities with margin lending to the stock market crash of 1929. Unlike margin lending at reputable brokerage firms or private banking institutions that offer lending against shares, the independent stock lenders are not really lenders at all.

    All stock lenders conduct their business in a similar manner. They sell all the shares after receiving them into their account in order to finance the loan; they cause the share price to decrease in value because they are selling the shares; when the share price declines significantly the borrower is in default and the lender asks for more shares or money from the borrower; by keeping the price down, the lender defaults on the loan, and keeps all profits from trading the shares. If the borrower and loan survive through the full loan term, the stock lender will have to go into the public market and buy back the shares in order to return the shares they sold to the original shareholder or borrower.

    If the lender disputes this just ask two simple questions, “where are my shares being held?” and “Can you show me an account statement verifying you did not sell my shares?” The lender can’t.

    The common practice for stock lenders is to send the borrower a small deposit of money on the same day they receive the shares. This is typically 10% – 25% of the anticipated loan value. There is a promise of a final funding amount to be sent after a 3 – 5 days pricing period has concluded. During this 3 – 5 days pricing period, the lender sells all of the shares to fund the remaining balance of the loan. If any shares remain after this period, the stock lender continues to harm the share price until all shares are sold.

    One way to avoid this problem is to not transfer the title of the shares to the lender. By keeping the shares at a reputable bank or financial institution a shareholder can avoid this type of deception.

    When a stock lender sells the shares pledged as collateral the price of the shares trading in the stock market often declines. Sometimes the share price declines significantly, causing the borrower to default on the loan before the first payment of interest is due. The market activity of the stock lender has historically hurt the stock market values of public companies and harmed all shareholders share value significantly.

    Some methods to avoid this problem is to not transfer the title of the shares to the lender. This will stop them from selling the shares. Another solution is to demand an account statement monthly or access to an online account statement daily to monitor the trading of shares. A borrower can request a joint account, escrow account or other holding account that will give both the lender and borrower access so they can monitor the shares pledged.

    There are two types of defaults on a stock loan. The first way a stock lender can cause a borrower to default is if the borrower stops paying the loan interest. As long as the borrower pays the interest on the loan, and makes all the payments according to the loan schedule, the lender cannot default on the loan.

    The second way a stock lender can cause a borrower to default is related to the stock market price of the shares. If the stock market price declines to the point called the default floor price, the lender will request that the borrower send in more shares or money to pay for the decline in the collateral value. The lender will continue to sell shares in order to keep the share price down and push the borrower into a default scenario. When the borrower has no more shares or money to send the stock lender will send a legal letter from their attorney saying the loan is defaulted. The stock lender will keep any shares remaining and all profits from trading.

    Some methods of avoiding this problem is to monitor all stock market trading activity daily to see what the lender is doing. A shareholder can request that the shares be held in a safe holding account like an escrow or joint account. If the shareholder does not transfer the title of the shares to the lender, no trading or selling can occur.

    Some common loan terms in the contract between a borrower and stock lender are; 1) the lender does not short sell; 2) the lender does not hold margin against the shares pledged; 3) the lender will not lend out the shares pledged; 4) the lender will not vote the shares pledged; and 5) the lender will return shares of similar quality back to the borrower upon repayment of the loan. These statements are misleading to a borrower and deceptive in nature.

    This is deceiving because if the shareholder transfers the title of the shares over to the stock lender, the lender will have all rights, title, and ownership of the shares fully. If the lender sells all the shares immediately, it is not short selling. The stock lender sold shares that were in its name, and that they had full ownership of. A stock lender can never short sell shares that it owns. The only way to avoid the selling of shares, and short selling, is if the borrower does not transfer title or ownership over to the stock lender.

    The stock lender does not take margin or loans against the shares because the stock lender sells all the shares that a borrower gives them. The lender cannot take margin against shares that they do not own or they have sold. This is a misleading statement in the contract.

    When the lender sells all the shares pledged for a loan, the lender cannot vote any rights associated with those shares. The reason the lender states in the contract that it will not vote any shares is because the stock lender does not own any shares, they have sold all shares pledged by the borrower. It is impossible to vote shares you do not have possession of. If voting is an important point to the borrower, the borrower should force the lender to vote the shares or to give the borrower the voting rights. If the lender will not, the borrower should not proceed with the loan.

    The lender states that they will return a similar quality of shares back to the borrower upon repayment of the loan. They do not mention that they will return the exact shares pledged as collateral. The stock lender cannot return the exact shares because they already sold all the shares pledged by the borrower. The stock lender must buy new shares in the public market and then return those shares to the borrower. The lender can never return the original shares pledged by the borrower because they sold them to many unknown people in the public stock market.

    To avoid losing shares, a borrower should follow these simple steps:

    1. Do not transfer the ownership or title of the shares to the stock lender
    2. Prohibit trading of shares by the stock lender
    3. Demand voting rights stay with the borrower
    4. Demand the shares be held with a bank or joint account structure
    5. Demand that the exact shares pledged are returned after repayment
    6. Demand all dividends be distributed to the borrower, no limit
    7. Monitor all trading activity closely for abnormal stock market behavior
    8. Do not enter into a contract that is not clear and understandable
    9. Ask for a margin loan at a reputable bank or brokerage firm
    10. Avoid all stock lenders and do not proceed to enter into a contract with them

    The companies that promote themselves as stock lenders all have several complaints, lawsuits, and unhappy borrowers. They are:

    Equities First Holdings
    Squadron Lending
    Lantau Holdings
    Qilin World Capital
    Stock Loan Solutions

    Some stock lenders may possess a financial license and promote that they are regulated. This is misleading because the license may be a limited license and the financial regulators are not monitoring the full activities of the stock lender. The licensed stock lender may also use a foreign holding company or headquarters in another jurisdiction that enables them to avoid the full monitoring of their activities.

    All stock lenders sell the shares that the borrowers pledge to them for financing. The stock lenders must sell the shares in order to fund the loan. Stock lenders do not intend to return the shares and hope that the borrower will default so the stock lender can keep the trading profits. Even if the stock lender shows some past track record of success, this should be reviewed very closely because the lender may have suffered significant losses while returning those shares since the stock price most likely increased in value. A past track record is also very misleading since the lender sold all the shares and then had to buy them back at higher prices in the public market.

    It is always best to deal with reputable banks or brokerage firms that hold full licenses and are monitored for all their activities onshore or offshore. They are regulated and monitored daily by government agencies that are formed to protect shareholders rights. Avoid the misleading stock lenders that promise so much and deliver very little.

West Market Street 10
Indianapolis 46204 IN US
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Reported Loss :1022 $
Severity of Scam :High
Reported by : arthur
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