Failure To Investigate Risk Dedicated to Delivering Results

Failure to Investigate Risk Lawyers Based in New York

A broker or financial advisor oversees explaining the rules and risks surrounding margin trading to their investors. This way, clients can make informed decisions when trading. However, sometimes brokers do not put their clients’ interests first and fail to investigate risk before opening a margin account. It is the duty of the broker to do the checks beforehand and ensure that their investors have the financial ability to afford a margin account. They must also ensure you are aware of the risks and that you are willing and able to take the financial risks involved before proceeding with the margin transaction.

An attorney from Weltz Law can help you with your failure to investigate risk case. Schedule your consultation by calling (877) 905-7671 today.

Risks of Margin Trading

Before deciding to engage in margin trading, the brokers must ensure that investors know of the risks. Here are some of the risks of margin trading:

  • It is possible that you lose more funds than you originally deposited in the margin account. If the value of the securities purchased on margin declines, you may be required to provide additional funds. These funds are directed to the firm that made the loan to prevent the forced sale of those particular securities, or even other securities within your account.
  • It is possible for the firm to sell your securities without notifying you. Some investors think that before the sale of the securities is made valid, the firm must contact them. This is not true. The firm can liquidate securities in their account without contacting the investors first. Although firms usually try to notify customers of margin calls to maintain good relationships, they are technically not required to.
  • Sale of securities in your account can be forced by the firm. If there is a margin deficiency, such as when the maintenance margin requirements exceed that of the equity in your account, the firm can force the sale of securities to cover the deficiency. If there is any short fall in the account after the sale, the investor needs to be responsible.
  • You may not be able to request for an extension on a margin call. Customers do not have a right to extension of time to meet a maintenance margin call, although extensions can be made in certain circumstances.
  • Even if a stock is halted or delisted, you may need to continue to pay interest on open short positions.

Practices of Firms

Firms can set their own house requirements, which are essentially their own margin requirements. They also have the right to raise maintenance margin requirements for specific stocks. This is to ensure there is an adequate amount of funds to cover any price swings. Changes in policies of the firm can realize effect immediately, resulting in a maintenance margin call.

Discuss Your Failure to Investigate Risk Case Today. We Represent Clients Nationwide.

If you think that your broker has failed to investigate your ability to take the risks involved in margin trading, a securities litigation attorney will be able to advise you on what to do next. Weltz Law is a firm based in New York that has been assisting many in litigation and FINRA arbitration for over two decades. Our attorneys will represent you and help you settle all the legal aspects of your failure to investigate risk case.

You can call (877) 905-7671 or submit a form on our site to schedule a meeting with an attorney.


Experienced & Effective
  • 30+ Years of Collective Experience

    Our attorneys have over 30 years of collective experience representing clients in all aspects of securities and commercial litigation.

  • Contingency Fees for Our Securities Law Clients

    We will not receive a penny in attorney's fees unless a positive recovery is obtained in your case. Contact us to see if you're eligible.

  • Free Consultations

    We will assess the merits of your claims and help you decide on the next step.

  • Litigated Claims in Excess of $50 Million for Our Clients

    Our firm is prepared to fight for you to seek maximum compensation.


Word From Former Clients
    Calmly walked me through the process.

    “Due to his hard work, the hearing lasted less than 30 minutes with the judge dismissing the complaint.”

    - L.K.
    Successfully represented me in a number of matters

    “Attentive to every aspect of my matters, always available to speak with me, gave me great advice and fought hard for me every step of the way.”

    - I.S.
    Truly terrific in every way.

    “He cared, he was responsive, and he guided me through a difficult time with compassion and expertise.”

    - F.S.
    I could not recommend him highly enough!

    “He was there to talk me through any questions and concerns I had until we decided on the best option for me.”

    - Securities Industry
    Smart, cost-efficient, and gets results.

    “My go-to lawyer for arbitration and regulatory matters for years.”

    - B.D.

contact us

Dedicated to Delivering Results Fill out the form below or call 877-905-7671 to schedule your free consultation
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.