Do Brokers Need Authorization to Make Changes?
In most instances, your stockbroker is required to obtain your permission
before making a purchase or sale in your investment account. When your
broker doesn’t get your prior authorization and goes ahead and makes
the transaction anyways, you may have a claim for unauthorized trading.
Even if your broker had good intentions and believed a particular transaction
was in your best interest, he or she cannot execute the transaction without
reaching you or getting your express approval before making the trade.
If you think your broker may have made transactions without your prior
knowledge or consent start gathering copies of important documents and
do not wait to speak with a respected and experienced investment fraud
attorney. The sooner you act the better chance you have of a positive
outcome during the mandatory FINRA arbitration.
If you discover the trades remain on your behalf without your permission
you will need to prove that the unauthorized transactions occurred, that
you did not give permission for the trade, and that you suffered loss
from the unauthorized trade. Keep in mind that customers can provide a
written and signed trading authorization in advanced that allows the broker
to buy and sell securities in the account in the broker’s discretion
and without having to contact the customer every time they do so. However,
even if you gave your broker written discretion to trade in your account,
the authority cannot be misused by making unsuitable or inappropriate
trades. This type of broker misconduct can lead to financial loss and
your broker may be liable.
You can get more information on unauthorized trading and what you should
do if you suspect your broker in engaging in misconduct by using our website.
Call us anytime for a free case evaluation.