Unauthorized trading is the purchase or sale of securities or other assets in a customer's account without the customer's prior knowledge and authorization. It is a violation of state and federal securities laws. This conduct can serve as the basis for a lawsuit in the event of investment losses.
Unauthorized trading can occur in a number of different ways. For example, a broker may place trades in a customer's account in order to generate commissions for themselves, even if the trades are not in the customer's best interest. A broker may also place trades in a customer's account without authorization if they believe that the trades are necessary to protect the customer's account from losses. However, this is only legal if the broker has a written discretionary trading agreement with the customer.
If you are able to prove that your broker engaged in unauthorized trading in your account, you may be entitled to recover your losses from the broker and/or the brokerage firm. You may also be able to recover punitive damages, interest and attorney's fees.
If you believe that you have been the victim of unauthorized trading, contact our law firm today for an investment loss consultation.