A specialized brokerage account enabling investors to borrow funds from the broker to purchase securities, allowing for leveraged trading opportunities.
Main/
Margin Accounts for Securities Trading
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Code
PS0071
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Name
Margin Accounts for Securities Trading
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Version
1.0
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Category
Wealth & Investment
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Created
2025-03-14
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Modified
2025-04-02
Related Techniques
- Leveraged trading amplifies potential price swings, making pump-and-dump or wash trading strategies more impactful.
- Criminals can push prices up or down swiftly, triggering margin calls or forcing rapid liquidations that benefit their positions.
- Permit leveraging borrowed funds to amplify the impact of manipulative trades and artificially inflate trading volumes or stock prices.
- Enable layering by mixing illicit funds with margin loans, masking suspicious capital inflows behind normal securities trading activity.
- Facilitate leveraged short selling crucial to dividend stripping, allowing rapid share borrowing and subsequent resale.
- Rapidly opened and closed margin positions create the appearance of multiple shareholders entitled to the same dividend credit.
- By using borrowed funds, criminals can expand trade volume to generate higher fraudulent tax refund claims.