The vast majority of investors work with stockbrokers and brokerage firms to build an investment portfolio. Your investment portfolio describes your financial standing as well as the goals you hope to accomplish through your investments. However, it is not uncommon for brokers to engage in misconduct that can result in stock losses that exceed hundreds of thousands of dollars.
One of the most commonly seen types of misconduct is unsuitable margin trading, which we describe in further detail below. You can also continue reading to learn more about what you can do to recover your losses if you’ve been a victim of excessive margin trades.
What Is Unsuitable or Excessive Margin?
Investing on a margin essentially means that you’ll be borrowing money from your stockbroker’s brokerage firm in order to make an investment. In most cases, this is not a reasonable route to take when you want to meet your investment objectives, as it adds significant risk to your investment portfolio.
What’s worse, you can lose out on your investment entirely if your account’s value declines—or any time the stock market itself takes a hit. This allows the lender to require you to deposit additional funds to your account or sell your securities.
As you can imagine, this can be devastating for investors who had been told by their broker that trading on a margin would be in their best interest, when in fact, it rarely is.
If your broker failed to inform you of the risks you were taking with an excessive margin, you may be able to obtain repayment for your stock losses when you report your loss to the Financial Industry Regulatory Authority (FINRA).
What You Need to Know about Your Arbitration Hearing
FINRA arbitration is similar to a lawsuit, except that with arbitration, you do not have the right to an appeal. You will be able to find resolution in your case sooner rather than later, though, when you choose arbitration, making it a better option for most wronged investors.
If you are interested in pursuing a FINRA arbitration hearing, you can speak with your attorney and learn more about what you can expect from your case.
Work with a Stockbroker Misconduct Lawyer
Our firm takes unsuitable margin trading seriously, and when you’re ready to hold your fraudulent broker accountable by suing for your investment losses, you can reach out to an experienced stockbroker misconduct lawyer at Meissner Associates for all the legal help you need.
Just call our office at 212-764-3100 or complete the brief contact form located at the bottom of this page to schedule your free case evaluation at your earliest convenience.