If you are a high net worth Bernstein client (i.e. Sanford Bernstein and/or Alliance Bernstein) who lost money on one of its strategies that involved a toxic combination of margin and options, you should know what the SEC (Securities and Exchange Commission) says about option trading on margin before deciding whether to continue to do business with Bernstein and/or signing any release of claims.
1. Using margin to trading options may expose you to significant investment risks;
2. Brokerage firms generally require you to have a margin account to trade options;
3. Brokerage firms do not allow you to use margin to purchase options contracts;
4. Brokerage firms may allow you to use margin to sell (or write) options contracts;
5. Options strategies that involve selling options contracts may lead to significant losses;
6. The use of margin may amplify those significant losses; and
7. Some of these strategies may expose you to losses that exceed your initial investment amount (i.e., you will owe money to your broker in addition to the investment loss).
If these risks disclosures do not match up with what you were told about your investment in options strategies coupled with the use of margin, then we recommend you contact a knowledgeable, trusted and completely independent professional about your rights before you sign away your rights to pursue claims against Bernstein. The Bernstein Options Advantage Fund sought minimal returns, but with a high degree of risk to your savings.
Vernon Litigation Group is a Naples, Florida based law firm with offices in Atlanta, that represents high net worth individuals and families throughout the United States with claims against financial firms who abuse the trust placed in them by high-net-worth families. Contact us at 239-319-4434 for more information.