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Do Brokers Need Authorization?

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Do Financial Advisors Need Authorization to Buy or Sell Securities in My Investment Account?

In most instances, your financial advisor is required to obtain your permission before making a purchase or sale in your investment account. When your advisor 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 advisor 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.

If you discover trades were made without your permission,you will need to prove that you did not give permission for the trade and you suffered losses from the unauthorized trade. Keep in mind that customers can provide their advisor with written trading authorization that allows the advisor to buy and sell securities in their sole discretion. 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. 

You can get more information on unauthorized trading and what you should do if you suspect your broker is engaging in misconduct by using our website. Call us any time at (800) 738-1960 for a free case evaluation.

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