Trading on Margin
Can an online broker like Etrade be held liable if they allowed you to purchase stock on margin that they had listed as a non marginable secruity. Etrade had FNM (Fannie Mae) listed as a non-marginable secruity but they allowed me to purchase 20,000 shares after hours on Sept. 5th at an average price of about $6.75 and when it opened for trading on Sept. 8 after the Government took them over, Etrade sold all my shares at $1.18 due to a margin call. This resulting in me losing over $40,000 of my money plus I now owe them over $63,000 in my margin account. If they would have prohibited me from buying this secruity using margin funds, I would still have about $5,000 of my own money and I wouldn't owe them any margin funds.
Re: Trading on Margin
Please answer the following questions directed to my office email address so I can advise you further.
1. Did ETrade solicit the trade through an ETrade broker?
2. Can you provide us with a copy of your new account application?
3. Do you have a history of buying speculative securities and/or have you ever had an account where you purchased on margin?
