Stoltmann Law Offices is investigating Interactive Brokers LLC. An arbitration panel recently found the discount brokerage firm liable for selling securities from client accounts to pay margin debt, resulting in large losses. The panel ordered the firm to pay $667,000 to a hedge fund affected by the losses. The hedge fund, Glen Lyon Long Term Options LP, sought between $1 million and $3 million. According to the Financial Industry Regulatory Authority (FINRA), the brokerage firm used a flawed “auto-liquidation” system. Instead of requiring the value of securities in margin accounts to stay above a certain level before paying, Interactive Brokers requires customers to let the firm automatically liquidate securities to bridge the gap. Glen Lyon claimed that their system backfired more than two times in 2011, and their margin account deficit quickly went up to $200,000. If you invested money with Interactive Brokers, you may be able to sue them for investment losses in the FINRA arbitration forum. Our securities lawyers can help you go over your options by calling 312–332–4200.
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