In the Lehman Brothers collapse numerous market participants trading derivatives lost substantial amounts of initial margin they had posted to Lehman as a counterparty to secure their swaps. Initial margin, an amount of liquid collateral protecting Lehman against adverse price movements arising from the volatility of a particular trade and counterparty credit risk, was usually commingled with Lehman’s own funds and rehypothecated. In the bankruptcy, trading counterparties were essentially left with a mere general unsecured claim for a corresponding amount. No regulator was to be blamed; swaps were largely unregulated. Most market participants just did not, or chose not, to consider the embedded counterparty credit risk they were taking.Congress subsequently passed the Dodd-Frank Wall Street Reform and Consumer Protection Act with its promise to regulate the entire derivatives market and protect market participants by, among other things, imposing regulatory requirements regarding margin segregation for both cleared and uncleared swaps. Funds ....