“The idea of “Wall St” taking your account (per the title of this article) would have to be the result of such a catastrophic and unprecedented cascade of failures–regulatory, legal, political, and financial simultaneously–that it probably means that your stocks would have lost most of their value anyway.”
Not exactly.
If the brokerage house gets hit with a high level of margin calls, say from crypto or other hedged assets which they cannot cover they need to access other assets to cover -fast. They could claim your assets as their’s to cover their liabilities.
I remember this from the 09 GFC. People on message boards giving advice how to acquire the stock certificates of their shares to prevent them from being loaned out (shorted) by brokerages or used as collateral by the brokerages.
I don’t think the article above is about short borrowing of shares.
Short selling/lending comes up in forum worries (like the 2008 message boards you mentioned), but that’s a separate issue which doesn’t strip your ownership or expose you to seizure in the way the article describes.
The article here is pushing a broader, more alarmist view about systemic legal risks during a crash, not everyday stock lending practices.