L.S. Vines - Page 4

                                        - 4 -                                         
               During August 1999, petitioner established brokerage                   
          accounts with DLJdirect and Ameritrade for the purpose of                   
          investing a portion of his compensation from settling the class             
          action suit.  Petitioner deposited $5 million in each of those              
          accounts.  Petitioner later established a brokerage account with            
          Terra Nova during December 1999.                                            
               During the fall of 1999, petitioner decided to wind down his           
          law practice and begin a new career as a securities trader.                 
          Previously, petitioner had traded in the stock market only                  
          irregularly.  Between December 1999 and January 2000, petitioner            
          concluded the class action suit, transferred his remaining cases            
          to other attorneys, paid off the balance of the lease of his                
          downtown-Birmingham law office, and terminated the lease.  By               
          late January 2000, petitioner had spent a substantial amount of             
          money equipping and organizing one floor of his home as a                   
          securities trading office.  Based on the volume and frequency of            
          petitioner’s trading, the parties have stipulated that petitioner           
          became engaged in the trade or business of trading securities on            
          January 28, 2000.                                                           
               Petitioner used margin borrowing as part of his securities             
          trading strategy.  On April 14, 2000, DLJdirect forced the                  
          liquidation of petitioner’s entire account and terminated                   
          petitioner’s trading on account of petitioner’s failure to cover            
          a margin call after technology stocks declined sharply during               






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011