Interactive Brokers is partially responsible for his plight.
http://wyckoff.dailyvoice.com/polic...ild-support-after-arrest-at-ac-casino/631533/
Customers of Interactive Brokers file class action complaint over management of portfolio margin acc
- Thread starter ajacobson
- Start date
http://wyckoff.dailyvoice.com/polic...ild-support-after-arrest-at-ac-casino/631533/
Frankly, this thread is one of the best aspects of ET. Yeah, we all disagree about IB's culpability but at least information is shared. People can assess their risks and act accordingly. But damn...from 23 mil to jail...because of a broker error! Come on people! Wake up damnit! Just kidding 
. Sort of.
. Sort of.IB was indeed culpable in the jail case as can be seen by the court sentence. Culpability was more doubtful for the class-action lawsuit in the first post.Frankly, this thread is one of the best aspects of ET. Yeah, we all disagree about IB's culpability but at least information is shared. People can assess their risks and act accordingly. But damn...from 23 mil to jail...because of a broker error! Come on people! Wake up damnit! Just kidding
There's a disconnect here in the comments I'm seeing. The plaintiffs likely were not sophisticated on a level that they're reasonably expected the understand portfolio margin. To the extent that Bob Morse (who seems to have a solid grasp of the concept...at the very least) feels he should qualify himself as not an expert, I think we can take the plaintiffs' lack of understanding for granted.
Secondly, they were under the direction and advice of a financial advisor.
So, it's petty clear they did not understand the risk that took on and placed a reasonable degree of trust in someone who was adequately qualified (weather qualified or not, I have little doubt this conforms to the plaintiffs' beliefs). So they shouldn't be left holding the bag, especially considering that a third party (IBKR) fully aware of and familiar with these risks was engaged in their behalf to provide services, and provides these services as a business for profit.
The advisor may well have had a reasonable belief that this was a temporary condition and wait and see was an appropriate response to these conditions. Prior experience with IBKR may have confirmed this.
IBKR took these actions against the plaintiffs (who signed the broker agreement under the advice of their investment advisor), not the broker.
And finally, no one has directly addressed if the instruments subject to portfolio margin treatment are enumerated by law (if they are and ETNs are not included, this is clearly the plaintiffs' win).
Now, let's assume the advisor lacks sufficient insurance or assets to compensate the plaintiffs for their loss. We're left with who should foot the bill for this? IBKR, who has the resources and with the sophistication of a publicly traded company specifically engaged in operations to turn profit on this risk; or demonstrably unsophisticated investors for whom this is a life altering financial hit?
Two pockets. You're on the jury. Do you ruin someone's life, or do you dent a company's profit over what we might consider a courtesy call after they unilaterally altered the requirements as prescribed by previously agreed contract (which may constitute illusory contact language, and thus unenforceable).
Who do you award the verdict to?
Secondly, they were under the direction and advice of a financial advisor.
So, it's petty clear they did not understand the risk that took on and placed a reasonable degree of trust in someone who was adequately qualified (weather qualified or not, I have little doubt this conforms to the plaintiffs' beliefs). So they shouldn't be left holding the bag, especially considering that a third party (IBKR) fully aware of and familiar with these risks was engaged in their behalf to provide services, and provides these services as a business for profit.
The advisor may well have had a reasonable belief that this was a temporary condition and wait and see was an appropriate response to these conditions. Prior experience with IBKR may have confirmed this.
IBKR took these actions against the plaintiffs (who signed the broker agreement under the advice of their investment advisor), not the broker.
And finally, no one has directly addressed if the instruments subject to portfolio margin treatment are enumerated by law (if they are and ETNs are not included, this is clearly the plaintiffs' win).
Now, let's assume the advisor lacks sufficient insurance or assets to compensate the plaintiffs for their loss. We're left with who should foot the bill for this? IBKR, who has the resources and with the sophistication of a publicly traded company specifically engaged in operations to turn profit on this risk; or demonstrably unsophisticated investors for whom this is a life altering financial hit?
Two pockets. You're on the jury. Do you ruin someone's life, or do you dent a company's profit over what we might consider a courtesy call after they unilaterally altered the requirements as prescribed by previously agreed contract (which may constitute illusory contact language, and thus unenforceable).
Who do you award the verdict to?
Agreed.
Does anybody not see something wrong with the system - for ordering child support of $51000 a month? based on what? non-guaranteed income from $25m? What is the risk-free rate of return on that? Taking prior 2/3 yrs trading income as yardstick, and fixing the payout is plain cruel on a trader.
That is a whole other can of worms brother. And yeah, it is a huge problem.
Indeed a big problem. It is much much more important in life to pick the right wife than the right investment.
I've never experienced divorce. Do women usually have it better during divorce? Are there occasions when women are the party asked to pay child support of $51k a month to the men? Anyway, why so much 51k? Does the child eat gold and bitcoins 3 meals a day?
Imputed income. They take what you made in the past and project it into the future. Watch the Joe Rogan podcast w/ Dave Foley to get a firsthand glimpse into hell. And no offense but good wives (and husbands) can change over time.
And alimony goes one way most of the time. From man to woman.