Trading Places (1983 film): Is it really possible for futures exchanges to seize their members' assets?

External question — Personal Finance Stack Exchange Author: Flux Original post: https://money.stackexchange.com/questions/141605 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I am trying to understand a scene in Trading Places (1983 film). After Randolph and Mortimer Duke failed to corner the frozen concentrated orange juice (FCOJ) futures market, the following conversation occurs: https://www.youtube.com/watch?v=RLySXTIBS3c&t=337s Exchange official #1: Margin call, gentlemen. Mortimer Duke: Why, you can't expect us to ... Exchange official #2: You know the rules of the exchange, Mr. Duke! All accounts are to be settled at the end of the day's trading, without exception. Randolph Duke: You know perfectly well we don't have three hundred and ninety four million dollars in cash! Exchange official #3: I'm sorry, boys. Put the Duke brothers' seats on the exchange up for sale at once, seize all assets of Duke & Duke Commodities Brokers, as well as all personal holdings of Randolph and Mortimer Duke. Is it actually possible for commodity futures exchanges to seize the assets of its member firms, as well as the personal assets of the firm's owners?

External answer — Personal Finance Stack Exchange Author: Morrison Chang Original post: https://money.stackexchange.com/a/141609 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. This question is sort of answered in the podcast (and worth a listen): NPR Planet Money Episode 471: The Eddie Murphy Rule (July 9, 2013) . From the transcript : [Host] SMITH: And this dramatic, crazy, clearly Hollywood ending - the bad guys lose everything, they get booted out of their rich positions in the market - this really happens sometimes, according to Tom. He says people would borrow money, bet it all on a market move, and when it went the opposite direction they had to pay up. [Guest] PERONIS: Most clearing houses had people who were referred to as leg breakers. You know, not - they weren't like real mobster, you know, leg breakers. But they were the ones who would say, all right, you know, time to pony up. All right, well, you know, we want your house. We want your IRA. SMITH: It would happen right there on the floor? PERONIS: That's a little overdramatized, but it would happen that day or the next day. You know, there wouldn't be much of a time lag. For a moment, I thought that guest was mistaken as I though that IRAs are sheltered from bankruptcy, but that protection only came about due to The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 , way after the movie was released. The Duke & Duke probably operated as a General Partnership where Randolph and Mortimer Duke could be personally held liable for the debts of the firm.