Just imagine the feelings you have when you receive confirmations from your broker or financial advisor showing trades that you did not authorize. You are not sure what to do or where to go when situations like this happen. This is referred to as unauthorized trading, and it violates securities industry rules.
What is Unauthorized Trading?
The Financial Industry Regulatory Authority (FINRA) sets standards that all stockbrokers and financial advisors must follow. One of them is unauthorized trading, and it is something FINRA takes seriously.
Unauthorized trading is when you are not notified in advance of any trades in your account. FINRA Rule 2010 states that your broker or adviser must have your approval first. The regulation ensures that they will go over the risks and relevant information and make sure you are comfortable with everything.
There are two ways that they can legally do these types of trades:
- Power of attorney (discretionary trades): This is a legal document where you will give your permission in writing stating that you will let your broker or advisor trade without advanced notification. It must be notarized and all trades that are submitted by the broker or financial advisor must be marked discretionary. This power must be renewed once a year with your written authorization.
- Margin Calls: Margin is when you are taking a loan from a brokerage firm to buy securities. If the value in the account falls below a certain level (equity), you will receive a margin call. This is where you will either send in money to bring the equity back up or the firm can sell out a proportionate amount of securities to cover the call.
These are the only two times that your broker or financial advisor can buy or sell in your account without speaking to you first.
If you did not give this authority to them, you may be entitled to full compensation for your losses plus the commissions. Your broker or financial advisor must get your permission to do any trades. Those who don’t are going against FINRA guidelines by focusing on the trades and commissions at your expense.
Unauthorized trading is against FINRA rules. You can fight back by giving us a call at 800.931.8452. Our unauthorized trading lawyers can examine your case and let you know what options are available.
Why Choose Us?
Our founder, Matt Wolper spent 14 years representing the big Wall Street firms in some of their most significant cases. He has an in-depth understanding of the financial industry rules and knows what it takes to get results. These insights help him to analyze the most complex financial products and determine what happened to you.
Matt is a litigator that specializes in these kinds of cases and knows what to do to ensure you are treated fairly. He can show how a firm, broker, or financial advisor did not follow FINRA’s rules. His knowledge and guidance are what give our clients a 99% success rate.
Matt has worked on hundreds of securities transaction cases across the country. He has gone before FINRA, the American Arbitration Association (AAA), state, and federal courts. Matt knows what to do to get results for you in unauthorized trading cases. You don’t have to sit and deal with the loss when you have options.
How We Can Help
We will hold your broker, financial advisor, and their firm responsible for unauthorized trading. Unauthorized trading is a prohibited practice, and you need someone on your side who knows the law and the securities industry.
We have the experience and knowledge to get you results. The Wolper Law Firm, P.A. has a 99% success rate for our clients. Call us today at 800.931.8452 to explore your options.
Forms of Unauthorized Trading
Unauthorized trading usually occurs in a couple of steps:
- Marking the trade as unsolicited: Anytime a broker or advisor is entering the trade, they must mark it as solicited or unsolicited. Solicited is when the broker calls you up and tells you to buy something. They will discuss everything about the investment and get your approval. Unsolicited is when you call up the broker or advisor and tell them to buy something. All trades must be marked as one of these. Some will mark the trade as unsolicited even though they never spoke to you first. This creates the appearance that you wanted to buy the position.
- Calling you after the trade: This is when your broker marks the trade as unsolicited and calls you later. They are having this conversation casually to let you know what was bought in the account. This is covering up the unauthorized trading and makes it seem like everything is normal.
If this happens to you, call the Wolper Law Firm, P.A. today at 800.931.8452. Our unauthorized trading attorneys know what to do to hold your broker, financial advisor, and the firm responsible.
Why Does Your Broker or Financial Advisor Do Unauthorized Trading?
FINRA requires that all brokers and financial advisors must look out for your best interests before their own. This does not always happen, and unauthorized trading is a way of going around these rules. A few of the most common reasons for unauthorized trading are:
- Increasing commission by making a large number of trades in your account
- Hiding the losses in your account before you discover what happened
- Receiving some personal benefit from the trade, such as getting a bonus, free lunch, golf outings, or some added perk with the total amounts of trades.
If you did not authorize the trade, the best approach is to contact the Wolper Law Firm, P.A. immediately. Our unauthorized trading lawyers know what to do to help you get your money back plus the commissions from these trades.
FINRA regulations are clear about what your broker or advisor must do, and not getting your authorization is in violation of them. Contact us now at 800.931.8452 and let us help you. We have a 99% success rate for our clients and will go after the broker, advisor, and their firm.
How Can You Prove Unauthorized Trading?
Unauthorized trading is considered to be misconduct by your broker or financial advisor. Their firms will argue that you are aware of these trades with the confirmations and statements you receive. Defense attorneys use this as evidence to show that you knew what was going on and authorized these trades. They will claim that this is your account and you are responsible for knowing what is happening.
Time is of the essence; the faster you act, the more likely it is that we can show you were not informed of the trades. You want to gather several pieces of evidence:
- Copies of your phone records and emails: This shows a timeline of communication between you, your broker, or your financial advisor and that a conversation never took place before the trade.
- Notes: This is a timeline of events on what happened, the dates, and what was said.
- Keep all trade confirmations and statements: Your trade confirmations and statements are what the firm will use to say you knew about these transactions. The moment you receive them is when you need to contact us at 800.931.8452. The longer you wait, the more the firm will claim that you authorized the trades and were aware of the investments in your account.
- Any recorded conversations: If you have any conversations with your broker or advisor, you want to include this information. It shows that they did not seek out your permission and did the trade anyway. You might catch the broker or advisor calling you to inform you of the trades after the fact.
If you are the victim of unauthorized trading, the best approach is to contact us immediately at 800.931.8452. Our team of unauthorized trading attorneys will act to ensure that you get fully reimbursed for any losses plus the commissions from these trades. The sooner you contact us, the more we can help you and eliminate any justifications for these trades.
Frequently Asked Questions for Our Unauthorized Trading Lawyer
Here are some of the most frequently asked questions about unauthorized trading for our unauthorized trading lawyer.
The first thing you want to do is to call us at 800.931.8452 and collect evidence. Time is of the essence in these cases; the faster you act, the stronger the case.
Your broker or financial advisor must look out for your best interests. Unauthorized trading goes against this, and you are entitled to reimbursement for any losses, commissions, and punitive damages. You want to call us at 800.931.8452 so we can go over your options.
Yes. You can sue your broker or financial advisor for unauthorized trading. When you opened the account, you agreed to settle these disputes in arbitration. FINRA has a process where your case will be heard by three arbitrators. They will look at your case and determine the losses, commissions, and punitive damages you may be awarded.
If you have any questions that have not been addressed, please call our attorneys at 800.931.8452 and let us help you to hold your broker, financial advisor, and their firm responsible for the unauthorized trading in your account.
Contact the Wolper Law Firm, P.A. Today
If you discover unauthorized trading, you will want to gather all of your evidence and contact us immediately. Time is of the essence in these cases.
Experience matters, and you want unauthorized trading lawyers that know what to do to hold these parties responsible. We will fight for you and make sure that nothing is left to chance. Call us today at 800.931.8452 and see how we can make a difference.