Have insiders become too bold? It's a question worth asking. Each week, news breaks about executives suffering margin calls. Directors of Boston Scientific (NYSE:BSX) made last week's highlight reel, while executives at General Growth Properties (NYSE:GGP) have suffered a similar fate. And, of course, there's Aubrey McClendon of Chesapeake Energy (NYSE:CHK).

I never thought I'd say this, but Oracle's (NASDAQ:ORCL) Larry Ellison could be next. Last week, a reader pointed me to a footnote on page 22 of the database deacon's latest proxy statement:

Includes 23,150,000 shares subject to currently exercisable options or options exercisable within 60 days of the record date and includes 911,744 shares owned by Mr. Ellison's spouse of which he disclaims beneficial ownership. Includes 442,241,175 shares pledged as collateral to secure certain personal indebtedness, including various lines of credit. [Emphasis added.]

So according to the numbers, 37.6% of Ellison's stake in Oracle -- equal to roughly 11% of the current float -- is at risk to Mr. Market's mood swings. Yikes. As if Oracle weren't already getting enough trouble from SAP (NYSE:SAP).

The good news? Last year, Ellison had 525 million shares committed as collateral, so he's reducing his exposure and paying off debt. Smart thinking.

I've never been in favor of buying on margin, and I'm still not. We know of its dangers thanks to Benjamin Graham, whose overleveraged portfolio nearly broke him during the Great Crash of 1929.

Graham was as smart as they come, Mr. Ellison. He's the man Warren Buffett calls his mentor. Please learn from his mistake; eliminate your margin exposure, lest you torpedo my portfolio, too.

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Fool contributor Tim Beyers recently returned from a tour of Silicon Valley with his Rule Breakers teammates, during which they visited more than a dozen established and emerging innovators. Care to learn more? Just tell us where to send you our updates, absolutely free.

Tim owned shares of Oracle at the time of publication. Chesapeake Energy is an Inside Value pick. Get access to all of Tim's Foolish writings here. The Motley Fool's disclosure policy hasn't bought on margin yet.