A margin account is different from a standard brokerage account. With a margin account, a customer borrows money from the broker to invest in more securities than they could otherwise do with the money they have available. Margin trading is riskier than normal investing but creates the possibility of greater financial gains.
If a broker or brokerage firm made unauthorized trades in your margin account or failed to inform you of the risks of excessive margin trading, you may be able to recover compensation. At Meyer Wilson, we have a long track record of winning big for our clients. Schedule a free consultation with one of our investment fraud lawyers to learn more about your options today.
Unauthorized Margin Trading
You have the right to sue your broker and potentially the brokerage firm that employs them if you suffered losses caused by unauthorized or inappropriate margin trading. In discretionary accounts, brokers are permitted to make trades at their own discretion, but only if they have written authorization to do so and inform investors of all the risks involved in margin trading.
Additionally, your broker must provide you with details about any trades they make in your account.
If you don’t provide your financial advisor with express authorization for specific trades or the authorization to make trades in the account at their discretion, and you suffer financial losses, you have the right to pursue legal action.
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Failure to Inform You of the Risks of Excessive Margin Trading
Your broker can also be held liable for any losses caused by excessive margin trading if they failed to properly inform you of the risks involved. Margin trading can put investors in an incredibly perilous position if an investment does not perform as expected.
Your broker must provide you with adequate notice of the risks involved. If they fail to do so, they could be held liable for any losses you endure as a result.
How an Experienced Investment Fraud Lawyer Can Help
When you hire an investment fraud attorney, they will begin investigating the details of your case to determine the cause of your losses and the potential liability of the broker and brokerage firm. Your lawyer can help determine how much your case is worth and prepare and file your lawsuit with the court before the filing deadline.
Your attorney will then begin preparing your case for arbitration or court. The majority of these cases are resolved through Financial Industry Regulatory Authority (FINRA) arbitration, where your lawyer will present your case to a panel of arbitrators who will make a legally binding ruling. However, a small number of cases are resolved through a courtroom trial.
Your lawyer may engage in settlement negotiations with the opposing party, attempting to come to terms with a settlement deal that will mean a quicker resolution to your dispute if an agreement can be reached.
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Who Is Responsible for Excessive Margin Trading Losses?
When you suffer losses due to excessive margin trading undertaken by your financial broker, they might not be the only party liable for your damages. Brokerage firms have a legal duty to supervise the activity of the brokers working for their firms. If properly supervising their employees, a brokerage firm can help minimize misconduct.
If the firm fails to properly train its brokers on the compliance requirements and supervise their trading activities to ensure they are handling their clients’ money in a responsible manner, you may be able to file a lawsuit against both the broker and the firm.
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The Cost of Hiring an Investment Fraud Lawyer to Help You Pursue Damages
When considering hiring an investment fraud lawyer to help you recover compensation after losses to your investment caused by excessive margin trading, you may be wary of the cost due to perceptions of lawyers charging a lot of money for their services.
While many attorneys do charge their clients a large retainer fee and a high hourly rate, this is not the case for investment fraud lawyers at Meyer Wilson. We work on a contingency fee basis, meaning you only pay for their services if you recover compensation from the liable party.
If your lawyer is unable to secure compensation on your behalf, you will not owe them a penny for their services. This, combined with the fact that victims of investment fraud generally recover significantly more money if they return the services of an attorney, means that failing to hire an attorney will likely cost you a lot more money than actually hiring legal representation.
Get Help from an Experienced Investment Fraud Lawyer Today
Attempting to recover compensation on your own without the assistance of an attorney can be extremely challenging, risky and time-consuming. By working with an investment fraud attorney from Meyer Wilson, you can feel confident that an experienced professional is handling your case.
We keep our caseload manageable so that we can devote the resources necessary to ensure our clients’ cases get the attention they deserve. Contact us today by phone or through our website to schedule a free case consultation with a member of our legal team.
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