As an investor, the trust you have in your stockbroker and financial institution should be complete. Sadly, many individuals and organizations within the financial industry break this trust to further their own financial interests. The good news: When your broker engages in misconduct that causes your stock losses, you may be entitled to financial compensation.
One of the more common ways brokers take advantage of their investors is through unauthorized trading. This occurs when your stockbroker or financial planner makes trades in your accounts without your permission. Many brokers get away with executing unauthorized transactions until the investor suffers a catastrophic loss.
Continue reading to learn more about what you should do if you discover substantial stock losses caused by your broker’s unauthorized trades. For help pursuing restitution, contact a stockbroker misconduct lawyer.
Examine Your Accounts
The first thing you should do if you suspect your stockbroker was making unauthorized trades in your accounts is to go through your accounts in great detail. Your lawyer will do the same, but before you can begin filing a claim to recover your losses, you need to be sure unauthorized trading did, in fact, occur.
It may come as a surprise to learn unauthorized trading is not always a Financial Industry Regulatory Authority (FINRA) violation. Some types of accounts, known as discretionary accounts, allow brokers to execute trades without obtaining the investor’s consent for every trade.
If you had a discretionary account, you may have a more challenging time holding your broker accountable for your losses. Once you know whether your broker had a right to make trades in your accounts, you can contact your lawyer to discuss the next steps for your complaint.
Contact Your Broker-Dealer
We always recommend you have legal representation prior to discussing your concerns with your stockbroker, their supervisor, and your financial institution. You need an advocate who will ensure misconduct isn’t swept under the rug.
Once you have a lawyer, our goal would be to bring our evidence and concerns to the attention of the appropriate parties to resolve your complaints. Depending on how these negotiations go, your next step may be to pursue a FINRA arbitration complaint.
Get Help from a Qualified Lawyer
If you have reason to believe your investment losses were caused by your broker’s unauthorized trading, reach out to an experienced investment loss lawyer at Wolper Law Firm. Schedule your free, no-obligation consultation so we can further discuss your stock losses. Contact us by calling 800.931.8452 or through the convenient contact form below.