On June 28th, the Seventh Circuit vacated a summary judgment enforcing promissory notes against borrowers who used the loan proceeds to participate in their employer's stock incentive program. The borrowers can assert the lender's violation of Federal Reserve Board Regulations G and U, which govern loans made for the purchase of securities, as affirmative defenses. The Court further found that issues of material fact precluded the entry of summary judgment on the borrowers' affirmative defense that the transactions violated the securities laws. Costello v. Grundon.