Have you discovered unauthorized transactions in your brokerage account? If your broker made trades with your money without your knowledge or consent and you incurred investment losses or unexpected commission expenses and fees, you may have the right to seek compensation from your broker or brokerage firm. Contact Erez Law PLLC for an initial case review with an attorney for unauthorized trades to learn how we can demand fair compensation on your behalf.
How Our Unauthorized Trading Attorney Can Help You
At Erez Law PLLC, we can alleviate the stress of an unauthorized trading claim by handling all the details of your case for you. Our process involves the following steps:
- Thoroughly investigating your claim to recover evidence of trading without your authorization, including brokerage account statements, stock ledgers, transaction receipts, market analyses, and email communications
- Documenting the expenses you incurred due to unauthorized trading, including excessive commissions/fees, and working with economic experts to calculate investment losses
- Identifying liable parties and evaluating your legal options, including the possibility of pursuing claims against individual brokers or brokerage firms that employed the brokers
- Seeking the compensation you deserve through settlement negotiations with liable brokers and firms, or through Financial Industry Regulatory Authority (FINRA) arbitration against member brokers/firms
- Representing you throughout the FINRA arbitration process, including by drafting a compelling statement of claim, selecting arbitrators, and presenting a persuasive case at the arbitration hearing
Our law firm has extensive experience handling unauthorized trading cases. We have successfully handled more than 2,000 arbitration cases and have over 35 years of experience representing investors. We’ve recovered hundreds of millions of dollars in compensation for investors who’ve experienced significant investment losses, including multiple awards for punitive damages. Contact us today for a free consultation.
What Is Unauthorized Trading?
Unauthorized trading occurs when a broker or financial advisor uses their access to a client’s brokerage account to make trades using the client’s assets without the client’s knowledge, permission, or approval.. Unauthorized trading may involve investing a client’s money into risky or speculative investments without advising the client or seeking their prior approval. Unauthorized trading can also involve excessive trading – commonly known as “churning” – designed to generate commissions and fees for the broker or advisor without regard for whether trades result in gains for the client.
By default, a broker must obtain a client’s approval before executing any trade on the customer’s account unless the client has opened a discretionary account, which allows the broker to make trades without seeking the client’s approval for each transaction at the broker’s discretion. Even then, a broker overseeing a discretionary account must make trades consistent with the client’s preferred investment strategy, financial goals, and risk tolerances that align with their best interest. Brokers must seek a client’s approval before making a trade that falls outside the scope of the client’s approved strategy.
Brokers also must refrain from excessive trading that can cost a client money through commissions and fees, unless the client has approved a high-volume trading strategy.
Common Signs of Unauthorized Trading
By familiarizing yourself with the signs of unauthorized trading, you are better positioned to protect your rights and financial interests should your broker begin to make unauthorized trades. Here are some of the most common red flags that indicate your broker may have engaged in unauthorized trading through your brokerage account:
- Unapproved or unexplained trading activity in your brokerage account
- Unanticipated losses in your account balances
- New investments appear in your account without your knowledge or approval
- Altered or missing trade confirmations
- Sudden changes to your portfolio composition
- Excessive numbers of trades
- High or unexplained broker fees
- Your broker refuses to speak on the phone or fails to return phone calls, emails, or text messages promptly
- Your broker offers shifting explanations for your brokerage account activity
- Your broker acts agitated or nervous when questioned about account activity
- Your broker makes unrealistic or overly optimistic promises of returns
Our attorneys can investigate unauthorized trading allegations to determine if your broker has violated their contractual duty to you.
Consequences of Unauthorized Trading
Brokers who engage in unauthorized trading may face legal and financial consequences for their actions, including:
- Financial liability for losses sustained by clients, including excess commissions or fees generated by churning activity, or losses on unauthorized investments or trades
- Loss of employment when brokerage firms terminate brokers who engaged in unethical behavior or actions that violated financial industry regulations
- Regulatory or disciplinary actions, including expulsion from industry associations like FINRA, revocation of brokers’ licenses, or orders from state and federal securities regulators barring brokers from offering or selling securities
- Damage to professional reputation, which can affect their future job prospects in the industry
Legal Remedies for Victims
Clients who sustain financial losses because of a broker’s unauthorized trading may pursue legal remedies through FINRA arbitration, including for:
- Reimbursement of commissions or fees generated through unauthorized trades or excessive trading
- Investment losses sustained on unauthorized trades
- Lost profits on continued investment growth when brokers make unauthorized trades out of a client’s position
Why Choose an Investment Fraud Lawyer from Erez Law
If you’ve lost money or investment opportunities due to unauthorized trading, your choice of representation can make a difference in the outcome of your claim against your broker. Choose Erez Law PLLC to fight for the compensation and accountability you deserve because:
- Our firm has a proven track record of successfully handling unauthorized trading claims and other broker negligence or misconduct claims, having recovered over $200 million in compensation for our clients.
- We have an in-depth knowledge of the FINRA arbitration process, having tried over 50 cases in arbitration hearings.
- Our nationally recognized attorneys have more than 35 years of experience standing up for the rights of individuals and brokerage firm clients who have sustained losses of wealth due to broker misconduct.
Contact an Unauthorized Trading Attorney Today
Have you discovered that your broker or financial advisor made unauthorized trades on your brokerage account? If so, contact Erez Law PLLC today for a confidential and complimentary consultation with an unauthorized trading lawyer to discuss your legal options for seeking compensation and accountability.