PLEASE NOTE: To protect your safety and the safety of our employees in response to the threats of COVID-19, we have encouraged all staff to work from home to the maximum extent possible. As a result, the office phone line may not be monitored at all times. Our attorneys are still available by email and can arrange to meet with you via phone or video-conference.

April 2020 Archives

Coronavirus and Margin Calls

Margin calls have become a major issues for investors as a result of the market turbulence caused by the coronavirus (COVID-19) pandemic.  Many investors use margin loans through their brokerage firm that are collateralized by the securities in their investment accounts.  FINRA has reported that, as of February 2020, the total balance of outstanding margin loans was in excess of $545 billion. When the value of investment accounts decline, as many did after the onset of the pandemic, margin contracts generally give brokerage firms the right to demand additional collateral from their customer, typically in the form of additional deposits into their brokerage account.  If the investor does not meet the margin call, firms may have the right to liquidate some or all of the positions held in the account to repay the balance of the margin loan. 

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Reasonover & Berg, LLC
400 Poydras Street
#1980
New Orleans, Louisiana 70130

Phone: 504-613-4941
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