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 serious violation of securities law and can have significant financial consequences for investors.
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.
Here are some tips to help protect yourself from unauthorized trading:
Review your account statements regularly and carefully. Look for any trades that you did not authorize.
Set up account alerts so that you are notified whenever a trade is placed in your account.
Only give discretionary trading authority to brokers that you trust and who have a good reputation.
Monitor your account activity closely and contact your broker if you have any questions or concerns.
If you believe that you have been the victim of unauthorized trading, contact our law firm today for an investment loss consultation.