Margin Trading

Buying on margin is a tactic certain investors use to increase their purchasing power and, hopefully, their investment return. When buying on margin, an investor borrows part of the funds needed to purchase a security from his or her brokerage firm.

While buying on margin carries a potential for greater reward it also carries increased risks, including the potential to lose more money than was initially invested. The security itself is considered collateral on the loan. As such, the firm has the right to sell the security - sometimes at a significant loss - without informing the investor beforehand.

Brokers have a duty to inform their clients of these risks prior to accepting purchases on margin. If an investor suffers losses after buying on margin and was not informed of the risks associated with borrowing from the securities firm, the broker and the brokerage firm may be liable for margin trading abuse.

Additionally, if a broker engages in margin trading on behalf of a client without first informing the client that a margin account is being opened, the broker can be held liable for any losses associated with buying on margin.

With over fifty years of combined legal experience, and having successfully represented over 800 individual and institutional investors, the securities arbitration lawyers at Meyer Wilson have the expertise, experience and resources necessary to review, investigate and aggressively pursue your margin trading abuse claim. We have won hundreds of millions of dollars in losses for clients nationwide. For assistance with your stockbroker misconduct claim, call us toll-free at 1.866.827.6537 or complete our online form for a free case evaluation.