South Florida Arbitration & Litigation Lawyer Blog
Margin Abuse – South Florida FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
A margin account is a type of brokerage account that allows customers to buy securities with money borrowed from their brokerage firm. Margin accounts are governed by Regulation T, adopted by the Federal Reserve, by various rules adopted by the Financial Industry Regulatory Authority and by the individual brokerage account terms that are set forth in the Margin Agreement. Many brokerage firm margin agreements allow the firm to change margin rules, without prior notice, at their election. Margin requirements can be met with cash or with eligible securities.
The use of margin, especially by the unsophisticated investor, may result in substantial losses to the investor. This is especially true if the investor is buying or selling options, short selling or using some type of other exotic trading strategy.
Please keep in mind that this information is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, this post should not be relied upon as legal or investment advice. If you have any questions concerning the contents of this post, you should contact a qualified professional.
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At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.