Stock broker margin account


Margin investing is a great way to increase your gains on an investment. Due to the nature of these accounts, however, they also create a potential for risk and abuse. A margin account investment is a high-risk form of investing, and only sophisticated investors who are completely aware of the potential risks involved should explore this realm.

With stock broker margin account 20 years of experience, securities law lawyer Steve A. Buchwalter stock broker margin account victims of fraud throughout Orange County and the surrounding areas. If you have been burned by your broker, we can help.

A margin account is a type of brokerage account that brokerage firms use to loan money to investors. The brokerage firm will provide a loan matching the amount of money the investor deposits into the margin account. The investor must eventually repay the amount loaned to the brokerage firm. One of the ways that brokerage firms make money is by immediately charging interest on a deposit.

For many firms, the interest they earn on margin accounts exceeds the amount of money they receive through regular commissions. In comparison, borrowing only 50 percent of the value of the stock seems like less of a risk.

This is a misleading analogy, however, a margin account stock broker margin account a minimum equity be maintained in the account at all times, regardless of changes in the stock price. Even if you lose the value of your stock, you are still responsible for repaying the brokerage firm the amount that you borrowed. Brokers and brokerage firms owe their investor clients a duty to ensure that the investments they make are in their best interests. An unethical brokerage firm may encourage an investor to open a margin account, stock broker margin account though the investor would be making a poor investment by proceeding with the arrangement.

To recover compensation from a deceptive stock broker margin account unethical broker, the investor must show that the broker owed the investor a duty of care and failed to act according to that duty. Brokers owe their client a duty to provide financial investment advice that is in the best interest of the stock broker margin account. After establishing duty and breach, the investor must show the amount of damages that he or she suffered as a result.

Investors may also pursue reimbursement for any excessive commissions paid to the broker. Buchwalter knows how important your investments are to you and your family. With decades of stock broker margin account as an attorney, licensed stockbroker and commodity trading advisor, he can help you build a claim to seek compensation from an unethical or negligent broker or brokerage firm. Buchwalter has provided guidance to Orange County residents victimized by unsuitable investments and other forms of broker fraud.

He also serves clients throughout Los Angeles and Ventura Counties, among other regions of California. Call us at or contact us online to set up a free consultation. Law Office of Steve A. Contact Law Office of Steve A. The Many Risks of Margin Accounts A margin account is a type of brokerage account that brokerage firms use to loan money to investors. Establishing Liability Against a Negligent Broker Stock broker margin account and brokerage firms owe their investor clients a duty to ensure that the investments they make are in their best interests.

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