Shepherd Smith Edwards and Kantas SBLOC Investor Lawyers May Be Able To Help
The law firm Shepherd Smith Edwards and Kantas is investigating claims against former Morgan Stanley broker Patricia Holder regarding allegations of unsuitable recommendations involving risky Securities-Backed Lines of Credit (SBLOC). The article encourages affected investors to seek a free legal consultation to explore potential recovery options for portfolio losses caused by these high-risk borrowing strategies.
If you sustained serious portfolio losses while working with ex-Morgan Stanley stockbroker Patricia P. Holder, contact us today to request your free case consultation. Shepherd Smith Edwards and Kantas SBLOC Investor Lawyers (investorlawyers.com) are investigating the broker fraud allegations made against her.
Already, a former customer of Holder’s has filed an unsuitable investment recommendation claim alleging the improper use of an (SBLOC) strategy over a 10-year period. The claimant is accusing the ex-Morgan Stanley financial advisor of Regulation Best Interest violations.
Patricia Holder, who is based in Miami, Florida, left Morgan Stanley in 2024. She is now an Insigneo Securities stockbroker and investment adviser.
What Is An SBLOC Strategy, And Why Is It Risky For Investors?
This is an approach involving securities-backed lines of credit (SBLOC), which lets investors borrow money by using securities in their investment accounts as collateral. The approach offers liquidity to the investor without having to sell their investments. It creates a revolving line of credit for them.
However, there are serious risks involved, such as:
- If the value of your securities goes down to an amount that no longer supports your credit line, you’ll get a maintenance call letting you know that you’ll have to add collateral or pay back the loan within a certain time period. Otherwise, your brokerage firm can sell your securities and keep the funds. This is known as a margin call risk.
- Market volatility, especially a decline, can increase your losses even as your debt remains.
- Once you employ an SBLOC strategy, you are likely committing to making monthly interest payments on these loans until you’ve repaid them.
- There may be unintended tax consequences.
- Variable rates may lead to rising borrowing costs.
SBLOC loans are often marketed as an easy way for an investor to gain access to more money. Unfortunately, the risks are commonly downplayed. These loans are too high-risk for novice investors. However, even accredited and sophisticated investors can sustain serious loss when borrowing on margin.
Brokers are supposed to ensure SBLOCs are suitable for the customer to whom they are making the recommendation. Employing this strategy also has to be in the investor’s best interests.
What Should You Do If You Suffered SBLOC Losses While Working with Miami Financial Advisor Patricia Holder?
It is important that you explore your legal options with one of our skilled SBLOC recovery attorneys. Shepherd Smith Edwards and Kantas SBLOC Investor Lawyers represents investors, including those with margin abuse cases and other complex portfolio claims, against US brokerage firms. We know how to build a solid SBLOC investor lawsuit. If we decide to work together, we will thoroughly investigate the cause of your losses and provide you with robust and customized securities representation.
We understand how emotionally and financially devastating it can be to suffer losses that could have been avoided were it not for the negligence of your financial advisor. Call (800) 259-9010 or contact us online.