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Mar 25, 2018

Margin account abuse Lawyers

If you’re an institution, or a stock broker, accused of committing margin account abuse on behalf of a client, you could face some severe penalties. Margin accounts are those which the brokerage firm uses to loan money to an investor. While margin accounts can double gains on an investment, it also doubles the risk. Interest immediately begins to be charged to the account, and a temporary drop in the stock’s value can result in liquidation of the stock. Margin accounts are very profitable, but come with risks. Many brokerage firms earn more money on margin interest than commissions. Brokers sometimes get a bonus on interest charged to their clients account. When management fees are charged instead of commission fees, the fees are charged on the portfolio size rather than the client’s equity in the account itself. As a result, in addition to interest costs, commissions and fees double in margin accounts.

The issue is when a broker tries dispelling a client’s fear of investing on margin by telling them they 90% or more on a house, and so borrowing 40-50% on stock is conservative. This is false, because most companies have debt and are highly leveraged. Buying stock in a company on margin adds leverage on top of that. Margin is a high risk method of investing.

Accused of Margin Account Abuse?

If you’re a broker, or institution, and are accused of margin account abuse we can help. We approach every margin account abuse investigation systematically and methodically. We will conduct a thorough investigation of the facts, and present your side of the story. Our immediate goal is to rebuke as many facts as possible, and build a defense strategy which absolves you of guilt.

Contact us for a risk free consultation on how we can help solve your case today.

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Manhattan

140 Broadway, 46th Floor
New York, NY 10005

Queens

35-37 36th St,
Astoria, NY 11106

Brooklyn

195 Montague St.
14th Floor,
Brooklyn, NY 11201

Manhattan

140 Broadway, 46th Floor
New York, NY 10005

Phone

888-977-6335

Queens

35-37 36th St,
Astoria, NY 11106

Phone

888-977-6335

Brooklyn

195 Montague St.
14th Floor,
Brooklyn, NY 11201

Phone

888-977-6335

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