I'm not fond of the term either, and would prefer ''willful failure to deliver'', but I daresay that's not nearly so sexy, eh? In any case, I'd really rather have this matter dealt with administratively and by rule, rather than dump it into already overburdened courts, enriching lawyers thereby.
FReegards!
Well, I'll certainly lobby for the "willful failure to deliver" terminology.
The point though, is that if the margin regulations are in fact properly followed, these don't end up in the courts. For investors selling out of a margin account, the margin is there to be liquidated, no court action needed. And for investors selling DVP, the instutions do need to enforce the prompt delivery rules, or fines/firings need to happen. And institutions are perfectly capable of requiring additional collateral from their hedge fund customers if they feel insecure at any point in time.
However, I am generally against rushed wholesale rule changes in the securities markets, as we have seen time and time again the Law of Unintended Consequences making an appearance.
Freegards.