How Can I Tell If My Broker Is Engaged In Unauthorized Trading?

What is Unauthorized Trading?

When you take your hard-earned money and put it in the hands of a broker, it means you trust them to handle your investments with integrity and a high standard of duty of care. Even though the Financial Industry Regulatory Authority (FINRA) oversees the trading industry to ensure the integrity of financial systems in the U.S., unfortunately, some brokers engage in bad practices leaving investors vulnerable to losing their money.

Unauthorized trading means that a broker is making trades for a customer without the customer’s prior authorization. Here are the red flags you should know.

Unauthorized Trading Warning Signs

Whether you’ve used the same brokerage firm for years or you are new to investing, it’s critical to review your account statements, trade confirmations, and online activities when it comes to your investment accounts. When checking your accounts, look for the following warning signs that point to excessive trading practices:

• Unauthorized transactions: Transactions in your account that you did not speak to your broker about and give your authorization for.
• Frequent trading – Recurrent in-and-out purchases and sales of securities that are not in line with the investment goals you discussed with your broker, as well as your tolerance of risk.
• Excessive fees – Fees that seem high or if one part of your portfolio looks exceptionally high.

What to Do If You Suspect Unauthorized Trading

You may submit a complaint to the U.S. Securities Exchange Commission (SEC) or FINRA if you suspect unauthorized trading or any other harmful practices, including the following:

• Churning (excessive trading for the sole purpose of generating commission for the benefit of the broker)
• Asset allocation misconduct
• Breach of fiduciary duty

It’s also critical to contact an experienced investment fraud attorney to learn your rights.

Were You a Victim of Investment Misconduct? We are Here to Help.

Suffering financial losses due to the negligence of a broker that you’ve trusted is a devastating experience — and not knowing where to turn for help can leave you feeling scared and hopeless. Know that you are not alone, and you have the right to seek justice.

Our highly experienced investment misconduct attorneys are here to hold financial institutions and brokers accountable for their negligent acts. We are here to support you through a difficult time and to help you recover your losses.

To learn if you are eligible for FINRA arbitration, call Meyer Wilson at (614) 532-4576 or contact us online to speak confidentially with our caring lawyers today.