August 11, 2020 Articles

Considerations in Defending Leverage-Related Cases

The primary claims that counsel and their brokerage firm clients are likely to encounter, and should consider, when defending the margin-related cases that are likely to arise as a result of 2020’s market volatility.

By Sean J. Coughlin and Gregory S. Sparer

In light of the volatility in the stock market during recent months as a result of the COVID-19 pandemic and the significant growth of securities-backed lending by brokerage firms, many investors find their securities accounts subject to margin or collateral calls. This article provides some background and practical tips and considerations in defending the anticipated uptick in leverage-related cases likely to ensue in the coming months.

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