A securities-backed loan, or asset-backed obligation, is debt collateralized by an investor’s existing portfolio of securities. This type of loan allows the investor to continue to buy and sell within the pledged account while still taking out cash for expenses of any kind.
While marketed to investors as an easy and flexible way to gain access to cash by borrowing against an existing investment portfolio, a securities-based loan comes with inherent risks. First, the assets pledged may fluctuate in value due to events outside of the investor’s control. If they decline, the investor may be forced to sell the holdings or come up with extra money quickly. Additionally, there may be unintended tax implications.
If you’ve been sold a securities-based loan that was unsuitable for you, you may have a case for recovery. It is advised to seek the advice of a trusted investor rights attorney who can guide you.
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Quick Review of Your Paperwork
If we think you might have a case, we will need to review a few basic documents. If we determine you have a case, then you will have the option to hire us as your attorneys to pursue it.
Signed Attorney/Client Agreement
If you decide to hire us to pursue your case, we will have you sign an attorney-client agreement so we can begin the process of trying to recover your losses.*
*In the vast majority of cases, our agreement is contingent – meaning you won’t owe us any money unless we recover money for you.