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Investment Fraud and Broker Negligence

Excessive Margin Trading

Excessive margin trading can have devastating results on an investment portfolio. When you purchase stock on a margin, you are buying stock with money that is borrowed from your brokerage firm.

Generally, in order to trade on margin, certain accounts must pledge by the trader as collateral for the loan, which is also interest bearing.  If the margin account value falls below certain thresholds, investors will be required to re-capitalize (make cash or stock additions to) their pledged accounts in order to meet minimum balance requirements.  This process is known as a margin call.

The process of trading on a margin is not for everyone; in fact, it is not a prudent course of action for most investors (the risk tolerance of most investors is not high enough to use a margin account for trading).  One of the most dangerous risks associated with margin trading (which is rarely disclosed by brokers) is the ability of an investor to lose more money than they originally invested in a particular stock, even though stock has not lost 100% of its value.  In addition, with investments purchased on a margin, investors may be prohibited from holding the investments until their original value has been restored, if the margin is called before that time.

If you have lost money due to unauthorized or excessive margin trading, you may be able to recoup you losses through securities arbitration.

Israels & Neuman PLC has knowledgeable securities attorneys that represent investors who have suffered losses due to the actions of brokers, financial representatives, broker-dealers, and financial institutions.  We have represented numerous victims of excessive or improper margin trading in FINRA arbitration proceedings throughout the country.

All of our financial arbitration cases are taken on a contingent basis, meaning that we do not get paid unless we recover compensation for you.

IF YOU FEEL YOU HAVE FALLEN VICTIM TO EXCESSIVE OR IMPROPER MARGIN TRADING,

             CONTACT ISRAELS & NEUMAN, PLC FOR A FREE CASE EVALUATION

             Aaron Israels: (720) 599-3505

             David Neuman: (206) 795-5798

 

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