I asked TD some questions early this morning and this was the part that was relevant to the board. This confirms it for me. Your shares are not "lended out", if you are in a cash account. Only a margin account, is susceptible to this type of skulduggery.

"Finally, concerning loaning out shares, if you have a Cash account with us, we will NOT loan out your shares for shorting under any circumstance.

However, if you have a Margin account, your shares are available for shorting. This is per our Accounts and Services Agreement. We have included a copy of the Agreement to this e-mail (in .pdf format) for your convenience.

Please note, shares held in a TD Waterhouse trading account are held by TD Waterhouse in "street" name, with monthly statements designating you as the beneficial owner. However, as the shares are held in our name, we officially own the shares. The monthly statement you receive from TD Waterhouse, as well as your trading confirmations, are legal documents which detail what portion of our holdings are yours - thus "beneficial ownership". Though we hold the stock in "street name" to facilitate our trading service, you are entitled to what you purchase.

With that said, the shares you purchase through TD Waterhouse are purchased from a reputable exchange; thus, the shares you purchase through us are yours. People can only short shares that we have in inventory at TD Waterhouse. In the rare event that someone does short your position, and you wish to sell your shares, the onus falls upon the person shorting the shares to cover their position. As the shares you hold at TD Waterhouse are your own, you can sell your shares at any time."

strato