Margin Calls in the Coronavirus Crash

Did you suffer significant losses due to margin calls in the coronavirus crash? If so, you may be able to get your money back with the help of a seasoned stock loss lawyer. 

Investors who have borrowed money from their brokerage firms did so on what’s called margin. Here, the investor was able to borrow money by using their securities accounts as collateral.

Generally speaking, margin and securities-backed lending can be risky because when the value of the securities in their accounts decreases, margin calls can be issued. Margin calls requires the investor to deposit additional funds into their accounts to keep their value.

But, when the unprecedented novel Coronavirus (COVID-19) struck the U.S. with force in March 2020, investors suffered damaging margin calls. Below, we go into further detail about the impact of the margin calls in the Coronavirus market crash and the steps you can take to seek full recovery with the help of a respected stock loss lawyer at Wolper Law Firm, P.A..

Coronavirus Market Crash Results in Extensive Margin Calls

When the stock market crashed shortly after the Coronavirus became a serious issue in the U.S., the securities that supported the margin (i.e. the collateral) decreased significantly. As a result, brokerage firms began margin calls and were liquidated at large losses.

In many cases, this happened without being given the opportunity to deposit additional collateral, which would have increased the value of their securities.

If this happened to you because your financial advisor did not handle your investment portfolio appropriately—whether through unsuitable investments, misrepresentation, failure to diversify, negligence, overconcentration, or securities fraud—you may be able to recover your losses.

Steps to Take If Your Stocks Were Liquidated in the Coronavirus Stock Market Crash

Initiating an arbitration claim through the Financial Industry Regulatory Authority (FINRA) may be a good option if you hope to recoup the losses that were liquidated through margin calls in the Coronavirus crash. Here, you will have the chance to present evidence to support your case in a hearing before a panel of one or three arbitrators.

Your financial advisor must justify their reasoning for how they handled your accounts. If the arbitrators decide that the broker acted negligently, they can be compelled to compensate you for the losses you suffered due to this negligence.

Although arbitration decisions cannot be appealed, the arbitrators will order you to be repaid within 30 days of their decision.

Reach Out to an Experienced Stock Loss Lawyer

If you endured considerable losses due to margin calls in the coronavirus crash, you may have legal options for financial recovery. Discuss your case with a qualified stock loss lawyer at Wolper Law Firm, P.A.. Call 800.931.8452 or submit the secured contact form below to schedule a free, confidential case evaluation.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]