Margin Call Lawsuits Expected to Spike

zdreg · Apr 3, 2020

NewTraderAdventure said:
they prob did him a favor

can surely buy them back cheaper now

ironchef said:
I wish my broker did that for me.

Take his remark seriously. Obvious he does NOT trade with Interactive Brokers which liquidates your position and is a serious place to trade and protects both the firm and the customer by closing his position.

tsfx · Apr 3, 2020

zdreg said:
Since you are polite I will assume that English is not your native language and I will explain. When your position is liquidated you must report it to the tax people. You might have to pay taxes.

What ? Pay taxes on what ? Lost money ?

I'm european, taxes apply on money earned only.

RedDuke · Apr 3, 2020

tsfx said:
What ? Pay taxes on what ? Lost money ?

I'm european, taxes apply on money earned only.

Imagine you earned in 2019 and never withdrew cash to set aside to pay taxes. Then lost whole account in 2020. You still owe 2019 tax. Has happened to people.

zdreg · Apr 3, 2020

tsfx said:
What ? Pay taxes on what ? Lost money ?

I'm european, taxes apply on money earned only.

tsfx said:
What ? Pay taxes on what ? Lost money ?
__________________________________
You might have Long term and short term positions. You don't want your long term positions which may be tax advantaged to be sold out.

ps TSFX I'm european, taxes apply on money earned only.

FYI In Europe taxes are not uniform from country to country.
----------------
pss I am sure most Europeans would not say I am European unless he is trying to hide something,

Nighthawk · Apr 3, 2020

guru said:
Lawsuits from investors who suffered significant losses due to margin calls amid volatile markets are likely to spike, even if a bull market returns, according to lawyer Andrew Stoltmann.

It´s common malpractice at Tier1.

Nighthawk · Apr 3, 2020

KCalhoun said:
Why don't bad traders take responsibility for their actions?

Dumbasses using margin and losing is Their responsibility not the brokers.

#whinybtches

Did you ever work for a Tier1 desk? Obviously not.....

wrbtrader · Apr 3, 2020

zdreg said:
FYI In Europe taxes are not uniform from country to country.
pss I am sure most Europeans would not say I am European unless he is trying to hide something,

I was born in Europe (France)...I don't think I've ever said to anyone I'm "European" nor do I remember any of my friends / relatives in Europe doing the same.

Yet, I grew up in U.S. now living in Canada. Called a half breed once when I was in high school but then got kicked out of school for knocking out 4 teeth of the kid that called me that.

Parents then put me in private school and got called "half breed" again. Smart this time from my 1st experience...didn't knock out someone's teeth but instead slept with his girlfriend a few times without him knowing it.

wrbtrader

https://en.wikipedia.org/wiki/Half-breed

MKTrader · Apr 3, 2020

KCalhoun said:
Why don't bad traders take responsibility for their actions?

Dumbasses using margin and losing is Their responsibility not the brokers.

#whinybtches

100%. I've been margin called once. It was dumb, I used too much leverage and tried to pick up too many dimes in front of a speeding train. I paid for it and moved on. The idea of a lawsuit never crossed my mind.

The only scenario I can justify a retail trader/investor suing is if it's a managed account and the risks and normal disclosures weren't provided. Even then, the account owner should at least Google terms like "margin," "options," "futures," "forex," "cryptocurrencies," etc. and realize the risk they're taking.

schizo · Apr 3, 2020

MKTrader said:
The only scenario I can justify a retail trader/investor suing is if it's a managed account and the risks and normal disclosures weren't provided. Even then, the account owner should at least Google terms like "margin," "options," "futures," "forex," "cryptocurrencies," etc. and realize the risk they're taking.

Okay, here's an example that will definitely result in a lawsuit. My stock (or any other instrument like futures, forex, etc) tanked and my account accordingly went down to $0. At this point, my broker MUST liquidate all my position. If the broker, however, did not sell my position and my account dips into the negative (say, $10,000) AND THEY DEMAND I ADD MORE FUND to bring my account back up to $0, then you can bet I will sue their ass. And I will win.

Overnight · Apr 3, 2020

schizo said:
Okay, here's an example that will definitely result in a lawsuit. My stock (or any other instrument like futures, forex, etc) tanked and my account accordingly went down to $0. At this point, my broker MUST liquidate all my position. If the broker, however, did not sell my position and my account dips into the negative (say, $10,000) AND THEY DEMAND I ADD MORE FUND to bring my account back up to $0, then you can bet I will sue their ass. And I will win.

To cite your specific example, has a stock ever gone negative?