Securities Based Lending

Investor Claims Is What We Do - All Day, Every Day

Since 1999 our law firm has recovered more than $350,000,000 for victims of investment fraud and misconduct.
  • Jury Verdict Won Against Prudential Securities $262 Million
  • Recovered for 100-Year Old Widow $30 Million
  • Recovered in Retirement Losses $10 Million
  • Recovered for a Large Group of Individual Investors $6.5 Million
  • Recovered for Elderly Victim in Ponzi Scheme Case $3.8 Million
  • Recovered for Elderly Ponzi Scheme Victim $3.2 Million
  • Recovered for More Than 50 Families of Ponzi Scheme in California $3.2 Million
  • Recovered for 35 Families in Northeast Ohio $3.1 Million
  • Losses Recovered for 20 Retirees $3 Million
  • Recovered for Retired Physician Against Major Wall Street Firm Prior to Filing FINRA Arbitration $2.5 Million

Securities Based Lending Scams

Securities based lending has become a booming business on Wall Street in recent years, but before customers enter into these lending arrangements, they need to understand the substantial risks involved, including having to sell all of your stocks and pay back the loan in the event of a market downturn.

Many stockbrokers sell their customers on the idea of securities based lending as a way to borrow money by using the stocks in their account as collateral. Customers are enticed with the low interest rates and the ability to borrow anywhere from 50 to 90% of their portfolio stock value. The only restriction is clients are not permitted to use the borrowed funds to buy more stock like a margin loan.

This sounds all well and good, and many borrowers see securities based lending as a good way to fund cash flow for small business or refinance other debt. But the devil is in the details and unfortunately, many customers don’t appreciate what exactly they are getting themselves into until it is too late. Interest rates on securities-backed loans can change every day. In addition, your brokerage firm may decide that a security that was previously eligible as collateral is no longer available leaving you with less money to borrow.

Importantly, securities-backed loans are demand loans, meaning that the lender may call the loan at any time. If you can’t repay it, the firm can move in right away and sell securities in your account to pay the balance in full. During volatile markets, the value of your stocks could quickly decline significantly and if you don’t have extra cash on hand, then you might be forced to sell your stocks and pay back the loan immediately. Wall Street likes these loans because it is another way for them to make money off the stock that is sitting in your investment accounts.

According to the SEC, between 2012 and 2014, one large brokerage firm reported a 70% increase in its securities based lending while another firm reported an over 50% increase.

Before you agree to a securities based loan, make sure you’ve read the fine print and understand exactly what you’re getting yourself into.

The Meyer Wilson Way

Results-Focused Representation
  • More than $350,000,000 Recovered
  • Voted Best Lawyers in America┬« for over Ten Years Running
  • David Meyer is the Immediate Past-President of Public Investors Advocate Bar Association (PIABA)
  • Over a Thousand Investor Claim Cases Since 1999
  • Exclusive Focus on Investor Claims & Class/Mass Action Lawsuits
  • Deep Bench of Skilled Attorneys and Staff Members

TRUSTED BY OVER 1,000 INVESTORS

Meyer Wilson has represented over 1,000 individual investors in high-stakes claims across the country, and has recovered over $350 million on their behalves. See what former clients have to say about our team.

  • “I primarily worked with Courtney Werning throughout the process and she was informative and knowledgeable. I trusted and fully recommend Courtney and her team.”

    - S.R.
  • “The communication throughout the process was on par - and they took the time to indulge me with the various questions and opinions.”

    - R.G.
  • “What I truly appreciated was getting a great result for my Mom with limited involvement/stress on her.”

    - S.W.
  • “We went to arbitration with the other respondent and I got to see firsthand the level of professionalism and expertise the Meyer Wilson firm can deliver.”

    - D.V.
  • “Chad would take the time to call and talk with me. His explanations were always clear and concise. I also appreciate all the effort put into the details and statistics required to argue this case.”

    - P.N.
  • “Meyer Wilson was able to produce the results that we felt were obvious and warranted while several other firms and even state offices simply had trouble understanding let alone moving the case forward.”

    - B.K.
  • “My overall experience was positive and I would encourage anyone who even thinks they have been a victim of stockbroker misconduct to call David.”

    - S.T.
  • “Meyer Wilson represented me in a suit brought last year against my brokerage firm, securing a very fair and equitable settlement for me.”

    - R.G., M.D.
  • “Right from the start, you had the passion and desire to win this case for us. I have never worked with an attorney or firm as compassionate as yours. I would highly recommend your firm to anyone.”

    - G.A.

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