Opinion ID: 2307607
Heading Depth: 1
Heading Rank: 9

Heading: The Account Statements as a Misrepresentation

Text: In addition to their deception-in-the-contract argument, appellants also claim that the monthly account statements sent by RCM were deceptive because those statements identified security positions that were In Your Account and other securities as Open Financing Transactions, indicating that the latter were being held as collateral. They argue that these statements implied that the securities held In Your Account were not being rehypothecated but were being held on behalf of the customer. However, no such inference could reasonably have been drawn by a signatory to the Customer Agreement, which gave RCM the right to rehypothecate all securities, whether excess collateral or not, as discussed supra. Based on the terms of the Customer Agreement, the distinction between collateral securities and non-collateral securities had no bearing on rehypothecation rights, but rather on what securities, or the equivalent cash value thereof, customers could withdraw from their account. Thus, these statements do not purport to make any representation, deceptive or otherwise, about what securities may or may not have been rehypothecated.