Dear Liz: How can I get help after my brokerage’s margin team illegally sold my Tesla and Palantir stock, citing market volatility and not notifying me?
Answer: Just because you don’t like the result doesn’t mean the brokerage acted illegally.
If you took out a margin loan using your portfolio as collateral, the agreement you signed allows the brokerage to sell investments if your account equity falls below a minimum level known as the maintenance requirement.
The firm generally doesn’t have to notify you in advance or let you choose what gets sold. Even if you’re given a deadline to make up the deficiency, the firm can liquidate your investments sooner if it decides waiting creates too much risk.
That’s not all. Brokerages can typically change their maintenance requirements at any time, without notice.
You may have heard the term “margin call” to describe the situation when an account’s equity falls below the maintenance requirement. Some people misunderstand that to mean that the brokerage actually calls you or otherwise gives you warning. That’s not the case.
Carefully read the margin agreement you signed. You can also ask the brokerage to explain in writing what triggered the liquidation.
If you believe there are discrepancies between what the agreement allows and what happened, you can complain to the firm’s compliance department, file a complaint with FINRA or the Securities and Exchange Commission and consult a securities attorney.
Dear Liz: I’d like to add to the conversation about where to store estate documents. Having lost my home, studio, office, and all the contents in the Eaton fire of January 2025, I can tell you that the temperature of our urban fire was high enough to incinerate the contents of many “fireproof” home safes in Altadena. I would no longer keep an only copy there.
In my family, we had arrangements made for me to handle my parents’ trust, and I can share that my parents’ financial planner has both hard and electronic copies of the trust. This might be another way families could access the trust, at least in a copy.
Answer: Thanks for bringing up such an essential point, which is that “fireproof” is a misnomer. Safes can be fire-resistant, but prolonged intense heat can turn paperwork to ash.
Previous columns mentioned the importance of keeping estate documents updated, which could make it more likely that an attorney would have a copy if the originals are lost.
Another increasingly popular option is to use online vaults such as Everplans. These secure online services allow people to store digital copies of important documents and deputize trusted people to access them either immediately or after the account owner’s death.
Dear Liz: A reader requested advice regarding a delayed tax refund. I had a similar problem a few years ago. The IRS owed me a substantial refund. I tried calling the IRS but couldn’t reach a person.
The automated system insisted my refund had been sent. I wound up calling my congressman’s office. They assigned a field representative to investigate. She was able to contact someone at the IRS who opened an investigation. She periodically followed up and kept me advised by email of her efforts. It took a few months but thanks to her work (and persistence), the IRS finally sent me my refund.
Answer: Thanks for the great tip! Elected representatives’ constituent services teams often can help people resolve issues with government agencies.
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Liz Weston, Certified Financial Planner, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizweston.com.
