Brokers occasionally recommend that customers borrow money with interest from a brokerage firm to buy securities or make other investments. This is called a margin account and is only suitable for certain types of investors.
Often brokers recommend that customers borrow on margin to purchase securities - for which the broker receives a commission - which puts the customer at risk if the value of the securities decline in value.
What customers do not often realize is that the brokerage firm maintains the unilateral right to call the margin loan -- without prior notice -- and to force the customer to sell the securities in the account to pay off the margin balance. This imbalance of power creates unique risks for customers that are often not properly explained when the customer opens a margin account.
If you have been harmed by your broker or the firm with respect to your margin account, please contact the Florida Securities Arbitration Attorneys of McCabe Rabin online or call 561-659-7878 or Toll Free 877-915-4040.