• Member Statistics

    • 842,962 Colleagues-to-Date [Sponsored by a generous R&D grant from iMBA, Inc.]
  • David E. Marcinko [Editor-in-Chief]

    As a former Dean and appointed University Professor and Endowed Department Chair, Dr. David Edward Marcinko MBA was a NYSE broker and investment banker for a decade who was respected for his unique perspectives, balanced contrarian thinking and measured judgment to influence key decision makers in strategic education, health economics, finance, investing and public policy management.

    Dr. Marcinko is originally from Loyola University MD, Temple University in Philadelphia and the Milton S. Hershey Medical Center in PA; as well as Oglethorpe University and Emory University in Georgia, the Atlanta Hospital & Medical Center; Kellogg-Keller Graduate School of Business and Management in Chicago, and the Aachen City University Hospital, Koln-Germany. He became one of the most innovative global thought leaders in medical business entrepreneurship today by leveraging and adding value with strategies to grow revenues and EBITDA while reducing non-essential expenditures and improving dated operational in-efficiencies.

    Professor David Marcinko was a board certified surgical fellow, hospital medical staff President, public and population health advocate, and Chief Executive & Education Officer with more than 425 published papers; 5,150 op-ed pieces and over 135+ domestic / international presentations to his credit; including the top ten [10] biggest drug, DME and pharmaceutical companies and financial services firms in the nation. He is also a best-selling Amazon author with 30 published academic text books in four languages [National Institute of Health, Library of Congress and Library of Medicine].

    Dr. David E. Marcinko is past Editor-in-Chief of the prestigious “Journal of Health Care Finance”, and a former Certified Financial Planner® who was named “Health Economist of the Year” in 2010. He is a Federal and State court approved expert witness featured in hundreds of peer reviewed medical, business, economics trade journals and publications [AMA, ADA, APMA, AAOS, Physicians Practice, Investment Advisor, Physician’s Money Digest and MD News] etc.

    Later, Dr. Marcinko was a vital and recruited BOD  member of several innovative companies like Physicians Nexus, First Global Financial Advisors and the Physician Services Group Inc; as well as mentor and coach for Deloitte-Touche and other start-up firms in Silicon Valley, CA.

    As a state licensed life, P&C and health insurance agent; and dual SEC registered investment advisor and representative, Marcinko was Founding Dean of the fiduciary and niche focused CERTIFIED MEDICAL PLANNER® chartered professional designation education program; as well as Chief Editor of the three print format HEALTH DICTIONARY SERIES® and online Wiki Project.

    Dr. David E. Marcinko’s professional memberships included: ASHE, AHIMA, ACHE, ACME, ACPE, MGMA, FMMA, FPA and HIMSS. He was a MSFT Beta tester, Google Scholar, “H” Index favorite and one of LinkedIn’s “Top Cited Voices”.

    Marcinko is “ex-officio” and R&D Scholar-on-Sabbatical for iMBA, Inc. who was recently appointed to the MedBlob® [military encrypted medical data warehouse and health information exchange] Advisory Board.

    entrepreneur

    Frontal_lobe_animation

  • ME-P Information & Content Channels

  • ME-P Archives Silo [2006 – 2020]

  • Ann Miller RN MHA [Managing Editor]

    ME-P SYNDICATIONS:
    WSJ.com,
    CNN.com,
    Forbes.com,
    WashingtonPost.com,
    BusinessWeek.com,
    USNews.com, Reuters.com,
    TimeWarnerCable.com,
    e-How.com,
    News Alloy.com,
    and Congress.org

    Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners(TM)

    Product Details

    Product Details

    Product Details

  • CERTIFIED MEDICAL PLANNER® program

    New "Self-Directed" Study Option SinceJanuary 1st, 2020
  • Most Recent ME-Ps

  • PodiatryPrep.org


    BOARD CERTIFICATION EXAM STUDY GUIDES
    Lower Extremity Trauma
    [Click on Image to Enlarge]

  • ME-P Free Advertising Consultation

    The “Medical Executive-Post” is about connecting doctors, health care executives and modern consulting advisors. It’s about free-enterprise, business, practice, policy, personal financial planning and wealth building capitalism. We have an attitude that’s independent, outspoken, intelligent and so Next-Gen; often edgy, usually controversial. And, our consultants “got fly”, just like U. Read it! Write it! Post it! “Medical Executive-Post”. Call or email us for your FREE advertising and sales consultation TODAY [770.448.0769]

    Product Details

    Product Details

  • Medical & Surgical e-Consent Forms

    ePodiatryConsentForms.com
  • iMBA R&D Services

    Commission a Subject Matter Expert Report [$2500-$9999]January 1st, 2020
    Medical Clinic Valuations * Endowment Fund Management * Health Capital Formation * Investment Policy Statement Analysis * Provider Contracting & Negotiations * Marketplace Competition * Revenue Cycle Enhancements; and more! HEALTHCARE FINANCIAL INDUSTRIAL COMPLEX
  • iMBA Inc., OFFICES

    Suite #5901 Wilbanks Drive, Norcross, Georgia, 30092 USA [1.770.448.0769]. Our location is real and we are now virtually enabled to assist new long distance clients and out-of-town colleagues.

  • ME-P Publishing

  • SEEKING INDUSTRY INFO PARTNERS?

    If you want the opportunity to work with leading health care industry insiders, innovators and watchers, the “ME-P” may be right for you? We are unbiased and operate at the nexus of theoretical and applied R&D. Collaborate with us and you’ll put your brand in front of a smart & tightly focused demographic; one at the forefront of our emerging healthcare free marketplace of informed and professional “movers and shakers.” Our Ad Rate Card is available upon request [770-448-0769].

  • Reader Comments, Quips, Opinions, News & Updates

  • Start-Up Advice for Businesses, DRs and Entrepreneurs

    ImageProxy “Providing Management, Financial and Business Solutions for Modernity”
  • Up-Trending ME-Ps

  • Capitalism and Free Enterprise Advocacy

    Whether you’re a mature CXO, physician or start-up entrepreneur in need of management, financial, HR or business planning information on free markets and competition, the "Medical Executive-Post” is the online place to meet for Capitalism 2.0 collaboration. Support our online development, and advance our onground research initiatives in free market economics, as we seek to showcase the brightest Next-Gen minds. THE ME-P DISCLAIMER: Posts, comments and opinions do not necessarily represent iMBA, Inc., but become our property after submission. Copyright © 2006 to-date. iMBA, Inc allows colleges, universities, medical and financial professionals and related clinics, hospitals and non-profit healthcare organizations to distribute our proprietary essays, photos, videos, audios and other documents; etc. However, please review copyright and usage information for each individual asset before submission to us, and/or placement on your publication or web site. Attestation references, citations and/or back-links are required. All other assets are property of the individual copyright holder.
  • OIG Fraud Warnings

    Beware of health insurance marketplace scams OIG's Most Wanted Fugitives at oig.hhs.gov

Margin Exchange Regulations

Government, Brokerage and Margin Exchange Requirements

By William H. Mears, CPA, JD 

Under the securities laws (the Securities & Exchange Act of 1934), the Federal Reserve Board is authorized to allow brokerage firms to lend against securities positions and charge interest, up to a legal limit, as outlined in Regulation T of the 1934 Act.

Regulation “T”

Under Regulation T, physicians and clients can borrow from a brokerage firm up to 50% of the long position value of their brokerage account. Under Regulation T, only securities listed on a registered stock exchange, the NASDAQ system, or certain approved over-the-counter stocks may be used in a margin account.

A physician investor who transacts in a margin account will be responsible for maintaining the equity in the account at the legal limit, i.e., the 50% level against a stock portfolio.

For example, if a physician investor has a margin loan of $500,000 against a $1 million stock account, and the value of the stock portfolio decreases to $500,000, the doctor-client will need to immediately repay $250,000 of the loan value, because the account no longer can support a $500,000 margin loan.

If the doctor-client is holding bonds in a margin account, the client may borrow under Regulation T up to 80% of the current market value of the securities. U.S. government and municipal bonds have even higher borrowing power.

Example:

Jim Hojo MD, owns a private healthcare equipment company that his father built into a $10 million business, would like to sell some of the equity of the company to long-time employees.

Jim is advised to sell 30% of his privately held company to an Employee Stock Ownership Plan. Jim was told that under Internal Revenue Code §1042, he will be afforded a tax deferral opportunity on the sale of a portion of the stock of the company to the employees. The delay in the recognition of the capital gains on the sale of a portion of the company to the employees is contingent upon compliance with certain criteria outlined in Code §1042.

Jim takes advantage of this transaction and, as advised, purchases domestic-issue floating rate bonds. He then borrows against the floating rate bonds in a margin account.

Because the bonds have a higher Reg T lending capacity, Jim is allowed to borrow 80% of the market value of the bonds. He takes his loan proceeds and invests in a diversified portfolio of equities.

If he had invested initially in stocks, his borrowing capacity against the stock position would have been limited to 50% of the market value of the account.

Failure to Maintain Regulation T Equity

If a doctor-client fails to maintain the Regulation T-required equity in an account, the client will get a “Reg T call” or a “margin call” from the brokerage firm. The Reg T call will require the doctor to meet the margin requirement through a deposit of cash or securities.

However, if the amount of the margin call is immaterial ($500 or less), the brokerage firm is not required to collect the additional margin requirement. Each brokerage firm will have house rules that further restrict the use and/or the availability of margin accounts.

Since securities in a margin account are held in a street name, a brokerage firm has the right to sell the securities if a Reg T or margin call is not met. Securities held in a street name are simply held for a customer’s account in the name of the brokerage house. If a margin call is not met, a customer will lose the securities in the account that are on margin.

Brokerage Credit Agreements

When opening a margin account, the physician investor must sign a credit agreement, which is not very different from any loan documentation, and a hypothecation agreement, giving the stock-broker the right to pledge the securities to a bank in order to provide for lending capacity. The loan consent agreement allows a brokerage firm to lend securities in a stock loan transaction.

Borrowing Capacity

To determine how much a physician-client can borrow, a series of complicated calculations must be made, and a number of key terms must be identified.

First, the doctor client’s equity in the account must be determined. The equity in the account will be the market value of the account less the debit balance (any outstanding debt). The long market value is the current market price of the securities in the account. The amount available for borrow will be limited by the Reg T restrictions, for example, 50% for securities. Whenever the market value of the securities in a margin account increases, the client will have increased borrowing capacity.

Next and conversely, whenever the value of the securities in a margin account decreases, the client will have a margin call. Excess cash in an account (cash from dividends, interest, or proceeds of sale of securities) will be included in the calculation of the margin call. An account holding cash will have increased buying power that cannot be reduced because of decreases in the market value of the account.

Finally, accounts that fall below the Federal Reserve Board requirements will be restricted in the execution of transactions. Stock exchanges also promulgate rules and regulations that must be complied with. The New York Stock Exchange and the National Association of Securities Dealers require an initial minimum equity of $2,000, or 100% of long market value, and a minimum maintenance requirement of 25% of the long market value [minimums may change without notice].

Assessment

The rules outlined above are for a long [owned securities] margin account. The rules for a short account [borrowed securities] are similar in that an uncovered (or naked) short margin requirement is still 50%, but a covered short sale has a Regulation T limit of 95%.

Conclusion

Have you, or a physician-client, ever been caught in one of these regulatory traps or “margin-calls”, and what was the outcome?

***

Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

%d bloggers like this: