The reversal of re-hypothecation leveraging. When the loss in value of the underlying assets in the brokerage's account forces the reversal of when a broker pledges hypothecated client owned securities in a margin account to secure brokerage funds. The result being possible disappearance of the commingled funds from the client's account.
The bank's President could not account for his customers funds because their rehypothecated accounts had experienced de-hypothecation and as a result their value was no longer held by the brokerage. (i.e. 1. MF Global/JPM. 2. City of London and Euro collapse.)