Margin Call: Definition, Triggers and How to Handle One

Increased volatility in the market can sometimes bring about uncomfortable and surprising situations for investors, especially when it comes to a margin call. You may find yourself asking when do margin calls happen and how do they work. When you buy stock on a margin, you’re essentially borrowing money from your broker to finance the purchase. While this is a strategy that can amplify your gains if the stock price goes up, it can also lead to painful losses if the stock price falls and you’re forced to sell other assets or put more money into your account to meet the margin call. In this article, you will learn everything there is to know about margin calls, including: IMPORTANT: If you have suffered significant investment losses as a result of being forced to liquidate a margin account, you should speak to an experienced securities fraud attorney about your legal options. What is a Margin Call? A margin call is a demand from your broker that you must deposit more money or securities into your margin account to cover potential losses. This typically occurs when a margin account runs low on funds, usually due to heavy losses in investments. Investment Losses? Let’s Talk. or, give us a ring at 800-732-2889. In most, but not all cases, your broker will notify you of a margin call and give you a set amount of time to deposit more funds or securities into your account. You typically will have two to five days to respond to a margin call. Timeframes for responding to a call may vary depending on your broker and the circumstances. Regardless of the time frame, it is important that you take action as soon as possible. IMPORTANT: If you aren’t able to meet the margin call fast enough or don’t have any extra funds to deposit, your broker may also force you to sell some of your securities at a loss in order to free up cash. This is known as forced liquidation. In fact, many margin account agreements allow brokerage firms to liquidate your portfolio at their discretion without notice. What Triggers a Margin Call? There are several things that can trigger a margin call, but the most common is when the value of securities in your account falls below a certain level set by your broker (house maintenance margin requirement) or securities exchange where securities are traded (exchange margin requirement). When this occurs, your broker will issue a margin call in order to protect themselves from losses and to ensure that your account has enough funds to cover potential losses. You’re then required to deposit additional funds or securities into your account to meet the call to bring your account back to the maintenance margin level. If you don’t make a deposit, your broker may sell some of your securities at a loss to cover the shortfall. Margin calls can occur at any time, but tend to occur during periods when there is high volatility in the markets. What happens when you get a margin call? A margin call is most often issued these days electronically, through your broker’s online platform. You can also receive an email or other notification from your broker informing you of the margin call and how much money you need to deposit by a certain time. What happens next depends on your broker and the situation. If your broker is not worried about the situation, they may give you some time to raise the extra funds to deposit into your account. If they are worried, they may demand that you meet the call immediately or they may even sell some of your securities to cover the shortfall if you don’t have the extra cash on hand without notice. Yes, a broker can sell your securities without your permission if you don’t have enough money in your account to meet a margin call. All of this depends upon the contract you signed when you opened your account which outlines the broker’s rights in these situations. It’s important to remember that your broker will most likely be interested in protecting their own financial interests rather than yours, so you should make sure that you understand your rights and obligations before entering into a margin agreement. Because they are not always required to give you time to meet a margin call, unless they are under contractual agreement to do so, they may not notify you before liquidating assets in your account to pay off any margin debt. If this happens, your investment portfolio may suffer significant losses. Unfortunately, even if you are in a position to meet the call, you may not be able to get your securities back if they have already been sold by your broker. When you opened up your margin account, you likely signed an agreement that gave your broker the right to sell your securities without notifying you first. This is why it’s important to understand the terms of your margin agreement before signing it. You should also be aware of the risks involved in trading on margin. MPORTANT: If your broker decides to sell your highly appreciated securities, you can be left with large deferred-tax liabilities as well as major capital gain tax expenses that must be paid in the relevant tax year. In addition, brokers can sell your securities within the margin account at an undervalued price, leaving you with even more investment losses. How long do you have to pay a margin call? The time frame for responding to a margin call can vary depending on your broker and the circumstances. Typically, brokers will allow from two to five days to meet the call. You will need to review your account agreement with your broker to be sure. Beware, most margin account agreements do not require the broker to give you any amount of time or notice before they liquidate. What happens if you cannot pay the margin call? Not meeting a margin call can have long-term consequences for...

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William King of Merrill Lynch Resigns Amid Unsuitable Investment Claims

Did William Worthen King Cause You Investment Losses? William W. (Bill) King, a prominent broker at Merrill Lynch, has resigned from the company following a surge in client complaints. King has faced allegations from at least ten customers since August. These individuals voiced their concerns over account mismanagement, specifically citing unsuitable investments and unauthorized trading of options positions. The disputes are currently under review, as reported by BrokerCheck. If you believe you have a claim against William King, you should strongly consider hiring an investment fraud lawyer. Do not wait until it’s too late to file a claim. The Law Offices of Robert Wayne Pearce, P.A., offers free consultations. Give us a call at 800-732-2889. Let’s discuss your case and see what we can do to help you get the compensation you need and deserve. William King Formerly With Merrill Lynch, Pierce, Fenner & Smith Incorporated Has 18 Customer Complaints For Alleged Broker Misconduct Who is William King formerly with Merrill Lynch, Pierce, Fenner & Smith Incorporated? William King (CRD #1432593) is a broker and investment advisor who was formerly registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated. He is currently a subject under investigation for securities industry sales practice abuse. Investment Losses? Let’s Talk. or, give us a ring at 800-732-2889. William King Customer Complaints William King has been the subject of 18 customer complaints that we know about to recover investment losses. Four of the customer complaints were settled by his employer in favor of the investors. Merrill Lynch denied 5 of the customer complaints.  To date, the customers have not taken any further action. There are 9 other customer complaints made within the last year relating to option transactions that are still pending. A Summary of Recent News Around Merrill Lynch Broker, William W. (Bill) King A well-known Merrill Lynch broker, William W. (Bill) King, who operated from Vero Beach, Florida, and New York, has recently resigned from the firm amid a significant increase in client complaints. Since August, a minimum of ten customers have come forward with grievances, expressing concerns over the mismanagement of their accounts, particularly relating to claims of unsuitable or unauthorized trading of options positions. These disputes are currently pending review, according to information obtained from BrokerCheck. Bill King, boasting an impressive 37-year tenure at Merrill Lynch, made the decision to voluntarily resign on April 21. Recognized for his expertise as an “international” broker, with a specific focus on serving foreign clients, King successfully managed a substantial $1.4 billion in client assets, an achievement acknowledged by Forbes. In fact, Forbes ranked him at #166 on their prestigious list of top wealth advisors in 2022, while also including him in their best-in-state wealth management teams list for this year. Furthermore, King consistently appeared among Barron’s top 1,200 financial advisors from 2018 to 2022, as confirmed by his former team webpage on Merrill’s platform. This recent departure by King aligns with a disconcerting trend observed among several prominent brokers who often secure positions on industry lists, only to later encounter regulatory issues or face client complaints. Notably, King already had six customer disputes on record, covering the period from 1999 to 2014. However, it is worth mentioning that four of those disputes were either resolved without any action or withdrawn. Just because Merrill Lynch rejects your complaint doesn’t mean your claim is invalid. Merrill Lynch has a history of legal action and regulatory scrutiny for investment losses. So, it’s important to know that their rejection doesn’t automatically mean your claim isn’t valid. If you have lost money due to the actions of William King, it’s important that you reach out to an investment loss attorney quickly because the statutes of limitations can bar your claims. Call us at 800-732-2889. Allegations Against William King    A sample of the allegations made in the FINRA reported arbitration claim settlements and/or pending complaints for investment losses are as follows: William King Red Flags & Your Rights As An Investor Of course, William King did not admit to any of the allegations. But regardless of whether an arbitration award was entered, a settlement occurred, or the customer complaint is still pending, the allegations made by customers are red flags which should put all current and former customers of William King at Merrill Lynch, Pierce, Fenner & Smith Incorporated on alert to review carefully the activity and performance of their accounts and question whether William King has engaged in any stockbroker misconduct that may have caused them investment losses. The large number of customer complaints at Merrill Lynch, Pierce, Fenner & Smith Incorporated also raises questions about the brokerage firm’s supervisory practices. If these red flags raise questions, call us and we will inform you of your rights as an investor. Did You Lose Money Because of Broker Misconduct? If you have lost money due to negligence or fraud by a stockbroker or advisor, the easiest way to know if you have a case is to call our office at 800-732-2889. Our investment fraud attorneys will evaluate your claim for free and let you know if we can help you recover your losses. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. File A Claim To Recover Your Investment Losses At Merrill Lynch, Pierce, Fenner & Smith Incorporated Due To William King If you have questions about Merrill Lynch, Pierce, Fenner & Smith Incorporated and/or William King and the management or performance of your accounts, please contact Attorney Pearce for a free initial consultation via email or Toll Free at 1-800-732-2889.

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Linhas de crédito com garantia pode ser mais perigosa do que as contas com margem

Many investors have heard of margin accounts and the horror stories of others who invested on margin and suffered substantial losses. But few investors understand that securities-backed lines of credit (SBL) accounts, which have been aggressively promoted by brokerage firms in the last decade, are just as dangerous as margin accounts. This is largely due to the fact that the equity and bond markets have been on an upward trend since 2009 and few investors (unless you are a Puerto Rico investor) have experienced market slides resulting in margin calls due to the insufficient amount of collateral in the SBL accounts. Securities-Backed Lines of Credit Overview It is only over the last several months of market volatility that investors have begun to feel the wrath of margin calls and understand the high risks associated with investing in SBL accounts. For investors considering your stockbroker’s offer of a line of credit (a loan at a variable or fixed rate of interest) to finance a residence, a boat, or to pay taxes or for your child’s college education, you may want to read a little more about the nature, mechanics, and risks of SBL accounts before you sign the collateral account agreement and pledge away your life savings to the brokerage firm in exchange for the same loan you could have obtained from another bank without all the risk associated with SBL accounts. First, it may be helpful to understand just why SBL accounts have become so popular over the last decade. It should be no surprise that the primary reason for your stockbroker’s offering of an SBL is that both the brokerage firm and he/she make money. Over many years, the source of revenues for brokerage firms has shifted from transaction-based commissions to fee-based investments, limited partnerships, real estate investment trusts (REITs), structured products, managed accounts, and income earned from lending money to clients in SBL and margin accounts. Many more investors seem to be aware of the danger of borrowing in margin accounts for the purposes of buying and selling securities, so the brokerage firms expanded their banking activities with their banking affiliates to expand the market and their profitability in the lending arena through SBL accounts. The typical sales pitch is that SBL accounts are an easy and inexpensive way to access cash by borrowing against the assets in your investment portfolio without having to liquidate any securities you own so that you can continue to profit from your stockbroker’s supposedly successful and infallible investment strategy. Today the SBL lending business is perhaps one of the more profitable divisions at any brokerage firm and banking affiliate offering that product because the brokerage firm retains assets under management and the fees related thereto and the banking affiliate earns interest income from another market it did not otherwise have direct access to. For the benefit of the novice investor, let me explain the basics of just how an SBL account works. An SBL account allows you to borrow money using securities held in your investment accounts as collateral for the loan. The Danger of Investing in SBL Accounts Once the account is established and you received the loan proceeds, you can continue to buy and sell securities in that account, so long as the value of the securities in the account exceeds the minimum collateral requirements of the banking affiliate, which can change just like the margin requirements at a brokerage firm. Assuming you meet those collateral requirements, you only make monthly interest-only payments and the loan remains outstanding until it is repaid. You can pay down the loan balance at any time, and borrow again and pay it down, and borrow again, so long as the SBL account has sufficient collateral and you make the monthly interest-only payments in your SBL account. In fact, the monthly interest-only payments can be paid by borrowing additional money from the bank to satisfy them until you reach a credit limit or the collateral in your account becomes insufficient at your brokerage firm and its banking affiliate’s discretion. We have heard some stockbrokers describe SBLs as equivalent to home equity lines, but they are not really the same. Yes, they are similar in the sense that the amount of equity in your SBL account, like your equity in your house, is collateral for a loan, but you will not lose your house without notice or a lengthy foreclosure process. On the other hand, you can lose all of your securities in your SBL account if the market goes south and the brokerage firm along with its banking affiliate sell, without prior notice, all of the securities serving as collateral in the SBL account. You might ask how can that happen; that is, sell the securities in your SBL account, without notice? Well, when you open up an SBL account, the brokerage firm and its banking affiliate and you will execute a contract, a loan agreement that specifies the maximum amount the bank will agree to lend you in exchange for your agreement to pledge your investment account assets as collateral for the loan. You also agree in that contract that if the value of your securities declines to an amount that is no longer sufficient to secure your line of credit, you must agree to post additional collateral or repay the loan upon demand. Lines of credit are typically demand loans, meaning the banking affiliate can demand repayment in full at any time. Generally, you will receive a “maintenance call” from the brokerage firm and/or its banking affiliate notifying you that you must post additional collateral or repay the loan in 3 to 5 days or, if you are unable to do so, the brokerage firm will liquidate your securities and keep the cash necessary to satisfy the “maintenance call” or, in some cases, use the proceeds to pay off the entire loan. But I want to emphasize, the brokerage firm and its banking affiliate, under the terms of almost all SBL account agreements,...

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Investidores com Linha de Crédito "Blown-Out" e Contas de Margem "Blown-Out": Como você recupera suas perdas de investimento?

Se você está lendo este artigo, estamos supondo que teve uma experiência ruim recentemente, seja em uma linha de crédito garantida por títulos ("SBL") ou em uma conta margem que sofreu chamadas de margem e foi liquidada sem aviso prévio, fazendo com que você percebesse perdas. Normalmente, os investidores com chamadas de margem recebem 3 a 5 dias para atendê-los; e se isso acontecesse, o valor dos títulos em sua conta poderia ter aumentado dentro desse período e a firma poderia ter apagado a chamada de margem e poderia não ter liquidado sua conta. Se você for um investidor que tenha experimentado chamadas de margem no passado, e esta é sua única reclamação então, não leia mais porque quando você assinou o acordo de conta com a corretora com a qual você escolheu fazer negócios, você provavelmente deu a ela o direito de liquidar todos os títulos em sua conta a qualquer momento sem aviso prévio. Por outro lado, se você é um investidor com pouca experiência ou com uma condição financeira modesta que foi convencido a abrir uma linha de crédito de títulos sem ser avisado sobre a verdadeira natureza, mecânica e/ou riscos de abrir tal conta, então você deve nos ligar agora! Alternativamente, se você é um investidor que precisava retirar dinheiro para uma casa ou para pagar seus impostos ou educação de seus filhos, mas foi convencido a manter uma carteira de ações e/ou junk bonds de risco ou concentrada em uma conta garantida por uma linha de crédito ou uma conta margem, então provavelmente podemos ajudá-lo a recuperar suas perdas de investimento também. A chave para uma recuperação bem sucedida de sua perda de investimento é não se concentrar na liquidação dos títulos em sua conta pela corretora sem aviso prévio. Em vez disso, o foco em seu caso deve estar no que lhe foi dito e se a recomendação foi adequada para você antes de abrir a conta e sofrer a liquidação.

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UBS Yield Enhanced Strategy Investors: Como você recupera suas perdas de investimento "UBS-YES"?

Se você está lendo este artigo, provavelmente investiu na estratégia UBS Yield Enhanced Strategy ("UBS-YES") e ficou surpreso ao saber que o programa UBS-YES no qual você investiu não era exatamente uma estratégia de investimento "neutra de mercado" durante o recente crash do mercado COVID 19. Apesar das representações de seu corretor UBS sobre a capacidade dos gestores do UBS-YES de "gerenciar riscos" e "minimizar perdas" através de sua estratégia de opção "condor de ferro", você ainda percebeu perdas substanciais. Você não está sozinho porque isso é exatamente o que muitos outros investidores do UBS-YES nos disseram sobre o passo dado a eles para investir no programa UBS-YES e sua experiência recente.

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UBS Financial Services, Inc. Sued for Florida e Ohio Advisor's Alleged Misconduct Involving a Credit-Line Investment Strategy

UBS Financial Services, Inc, ("UBS") empregou um consultor financeiro (o "FA") que tem escritórios em Bonita Springs, Flórida e Sylvania, Ohio. O UBS tinha a FA e outros funcionários do UBS em sua equipe como consultores de investimentos, gerentes de investimentos, assessores financeiros e planejadores financeiros com habilidades especiais e experiência na gestão de carteiras de títulos e assuntos financeiros, patrimoniais, aposentadoria e planejamento tributário.

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Investidores em petróleo e gás: Como você recupera suas perdas em investimentos em petróleo e gás?

Investidores em petróleo e gás: Como você recupera suas perdas em investimentos em petróleo e gás? Se você está lendo este artigo, estamos supondo que você investiu em um ou mais daqueles estoques de petróleo e gás mal representados e inadequados, títulos, parcerias limitadas, commodities, pools de commodities e/ou produtos estruturados como investimentos alternativos ligados ao setor de petróleo e gás dos mercados de ações e commodities. Não ficaríamos surpresos se você fosse informado de que os grandes conglomerados de petróleo e gás tinham um histórico comprovado de grandes dividendos muito superiores aos rendimentos dos investimentos de renda fixa que você estava acostumado, mas não disse nada sobre a volatilidade desses tipos de investimentos. Talvez você esteja lendo esta página porque seu consultor financeiro recomendou que você investisse suas economias de aposentadoria em alguns daqueles produtos mais complexos e alavancados estruturados de petróleo e gás embalados como Exchange Traded Funds (ETFs), Exchange Traded Notes (ETNs) ou outros Exchange Traded Products (ETPs), que foram alavancados de duas a três vezes e falharam em março deste ano. Estes não foram investimentos adequados para aposentados com perfis de risco conservadores ou moderados para investidores. Seu consultor financeiro o recomendou investir sem explicar a natureza, mecânica ou riscos de qualquer um desses investimentos em petróleo e gás? Seus investimentos foram superconcentrados (mais de 10% de sua carteira) por seu corretor ou consultor de investimentos no setor de petróleo e gás para substituir os títulos que você possuía para as ações que pagavam dividendos mais altos? Você perdeu 50% (50%) ou mais desses investimentos no setor de petróleo e gás? Não estamos chocados porque isso é exatamente o que muitos outros investidores nos disseram sobre o que aconteceu com eles recentemente. Agora vamos dizer a vocês o que fazer em relação a essas perdas nos investimentos em petróleo e gás. Seu corretor tinha o dever não só de entender mas também de explicar a natureza, a mecânica e todos os riscos associados a esses investimentos antes de vender-lhe esses investimentos, particularmente algumas das provisões dentro das ETNs, onde o corretor-dealer que emitiu as ETNs ou ETPs poderia resgatá-las ou aposentá-las e forçá-lo a perceber enormes perdas. Seu corretor também tinha o dever de certificar-se de que eles eram investimentos adequados antes de serem recomendados à luz de sua tolerância ao risco e condição financeira e não concentrar excessivamente os investimentos no setor volátil de petróleo e gás em sua carteira. Infelizmente, muitos consultores financeiros que não entendiam a natureza, mecânica ou riscos venderam estes investimentos a clientes com risco conservador e moderado que procuravam aumentar sua renda para sua aposentadoria. Estes não eram investimentos adequados para investidores com esse tipo de perfil. Se seu assessor financeiro apresentou erroneamente a natureza, mecânica ou riscos desses investimentos de petróleo e gás ou os riscos não foram completamente explicados, ou se você estava super concentrado (mais de 10%) no setor de petróleo e gás, ou se não era do seu melhor interesse (ou inadequado), e/ou se seus investimentos foram liquidados sem aviso prévio devido a chamadas de margem, você pode ter o direito de apresentar uma reclamação de arbitragem contra seu assessor financeiro e/ou a corretora que o empregou. Não há como você recuperar suas perdas nestes investimentos de petróleo e gás sem alguma ação legal. No The Law Offices of Robert Wayne Pearce, P.A., representamos os investidores em disputas de investimento por investimentos errôneos e inadequados em ações de petróleo e gás, títulos, parcerias limitadas, commodities, pools de commodities e/ou produtos estruturados como investimentos alternativos ligados ao setor de petróleo e gás dos mercados de ações e commodities em procedimentos de arbitragem e mediação da FINRA. As reclamações que apresentamos são por fraude e deturpação, violação do dever fiduciário, falha na supervisão e recomendações inadequadas em violação às regras da SEC e da FINRA e às normas do setor. O advogado Pearce e sua equipe representam investidores em todos os Estados Unidos com base em CONTINGÊNCIA, o que significa que você não paga nada - SEM TAXAS - a menos que coloquemos dinheiro no seu bolso após recebermos um acordo ou sentença de arbitragem FINRA. Se habla español CONTATO-NOS PARA UMA CONSULTA INICIAL GRATUITA COM OS ATORNEYS DE INVESTIMENTO DE PRODUTOS ESTRUTURADOS EXPERIENTES EM ARBITRAÇÕES FINRA Os Escritórios de Advocacia de Robert Wayne Pearce, P.A. têm advogados altamente experientes que trataram com sucesso muitos casos de investimento em petróleo e gás e outros assuntos de direito de títulos e disputas de investimento em procedimentos de arbitragem FINRA, e que trabalham incansavelmente para garantir o melhor resultado possível para você e seu caso. Para representação dedicada por um advogado com mais de 40 anos de experiência e sucesso em casos de produtos estruturados e todos os tipos de disputas sobre direito de valores mobiliários e investimentos, entre em contato com o escritório pelo telefone 561-338-0037, ligação gratuita 800-732-2889 ou via e-mail.

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FINRA Arbitragem: O que esperar e por que você deve escolher nosso escritório de advocacia

Se você está lendo este artigo, provavelmente é um investidor que perdeu uma quantia substancial de dinheiro, pesquisou no Google "FINRA Arbitration Lawyer", clicou em vários sites de advogados, e talvez até falou com um chamado "Securities Arbitration Lawyer" que lhe disse após um telefonema de cinco minutos que "você tem um grande caso"; "você precisa assinar um contrato de retenção com base em 'taxa de contingência'"; e "você precisa agir agora porque o estatuto de limitações vai funcionar".

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72 (t) Aposentadoria antecipada - Não para mim!

A seção 72 (t) do Código da Receita Federal é muitas vezes tocada como o segredo da aposentadoria antecipada por corretores e consultores financeiros em seminários gratuitos e almoços gratuitos para funcionários de grandes corporações com participação nos lucros e planos de pensão e 401(k)s. Apresentações são feitas em hotéis e restaurantes de luxo para induzir os funcionários a se aposentarem ou retirarem seus 401(k)s mais cedo do que poderiam ter feito através de uma brecha bastante desconhecida que permite evitar a penalidade do IRS por retirada antecipada. Também é prometido aos funcionários que eles podem descontar suas economias para a aposentadoria na faixa dos 40-50 anos, reinvestir o dinheiro e viver dos lucros para o resto de suas vidas. Mas há muito mais benefícios para a aposentadoria antecipada que apenas evitar a penalidade da Receita Federal.

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Os escritórios de advocacia de Robert Wayne Pearce, P.A. ganham o prêmio $6 milhões mais contra o UBS e UBS Porto Rico

Em um processo de arbitragem contra o UBS Financial Services, Inc. (UBS) e UBS Financial Services, Inc. de Porto Rico (UBS-PR), os escritórios de advocacia de Robert Wayne Pearce, P.A. ganharam US$ 4,25 milhões em danos compensatórios mais juros de 6,25% a partir de 28 de fevereiro de 2014 e custos de US$ 170.000 para um dos clientes do escritório no mês passado. Um resumo das alegações de nossos clientes contra o UBS e o UBS-PR é apresentado abaixo. Se você ou qualquer membro de sua família recebeu recomendações inadequadas similares do UBS-PR e seus corretores, ou se encontrou com uma conta superconcentrada em títulos municipais de Porto Rico e/ou fundos de títulos fechados, ou se você tomou dinheiro emprestado do UBS e usou seus investimentos como garantia de empréstimo, talvez possamos ajudá-lo a recuperar suas perdas. Contate nosso escritório o mais rápido possível para uma consulta gratuita sobre seu caso. O tempo é essencial!

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