Brokers are not allowed to sell your stocks unless you have given them permission to do so. You have the ultimate authority over how the money you invest is handled. However, you can grant permission to a broker to trade your stocks in different ways. You may choose to enable them to make trades that meet certain criteria at their own discretion.
At Meyer Wilson, we have a long history of helping victims of investment misconduct who have lost money because brokers sold and bought stocks and other securities without first obtaining permission. Reach out to an experienced unauthorized trading lawyer at our firm to schedule a free consultation with a member of our legal team today.
A Broker Who Sells Stocks Without Permission from Their Client Is Guilty of Investment Misconduct
When a broker sells the stocks of a client without first obtaining permission from the investor, they are guilty of investment misconduct. Investors have a right to determine how their money is being handled. If a stockbroker fails to obtain permission from their client before selling or buying stocks or other securities in their account, they are subject to legal action.
Unauthorized trading can leave a broker facing both criminal charges and civil lawsuits. The brokerage firm that employs the broker could also face legal challenges for failing to supervise the actions of their brokers.
An experienced broker misconduct lawyer can help you take legal action against both the broker and brokerage firm that handled your money.
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Different Means of Authorizing Trades
While a broker must obtain authorization to sell your stocks, that does not necessarily mean they have to come to you to have you approve every transaction they make. The means by which authorization for trading is granted will depend on the terms outlined in the investment contract you sign when you begin working with your broker.
Transactions Authorized on a Case-by-Case Basis
When agreeing to the terms under which your money will be handled, you may choose to maintain strict control over your account and require your broker to obtain your permission for each transaction on an individual basis before selling or buying any securities with the money in your portfolio.
Granting Your Broker Permission to Make Trades at Their Own Discretion
Alternatively, you may choose to take a more hands-off approach to your investment. When signing your investment contract, you may grant your broker the ability to make trades with your assets at their own discretion as long as the transactions meet certain criteria.
As long as the trades your broker makes with your money fall within the outlined parameters, they are not guilty of making unauthorized trades. An experienced investment fraud lawyer can review the terms of your investment contract and the trades your broker made to ensure they are legal. It is critical that all appropriate documents are presented to you and that you sign them before any discretionary trading can begin.
Filing a FINRA Arbitration Claim After Losing Money Due to a Broker Selling Your Stocks Without Permission
If your broker sells your stocks without obtaining your permission, you have the right to pursue compensation for your losses. The most common method for recovering losses in these cases is through arbitration by the Financial Industry Regulatory Authority (FINRA).
The majority of investment contracts contain a clause stating that any disputes that may arise will need to be resolved through arbitration. FINRA arbitration benefits both parties. For investors, pursuing compensation through arbitration offers a much quicker option for recovering damages than would be possible if they took their case to trial.
Meanwhile, FINRA proceedings offer a level of privacy to brokers and brokerage firms that may wish to avoid shining the light on their illegal activity. FINRA arbitration is closed to the public, and only the final decision of the arbitrator or arbitration panel is released to the public.
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Don’t Wait to Take Legal Action if You Suffered Losses Caused by a Broker Selling Your Stocks Without Permission
If a broker sold your stocks without your permission, you should act quickly to give yourself the best possible chance of recovering the money you need and deserve. Various deadlines may apply to your case, limiting the amount of time you have to take legal action. If you miss a deadline, you will likely be out of options for recovering the money you need and deserve.
Hiring an experienced attorney to help with your case as soon as possible after discovering that your broker sold your stocks without your permission is the best way to ensure you meet all applicable deadlines.
Furthermore, the earlier you hire an attorney, the easier it will be for them to build a strong case on your behalf and give you the best chance at recovering the money you need and deserve.
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Get Help from an Experienced Investment Fraud Lawyer Today
Securing the services of an experienced investment fraud lawyer is the best way to improve your chances of recovering the money you need after suffering financial losses caused by unauthorized trading. At Meyer Wilson, we have been helping investment fraud victims recover compensation from brokers and brokerage firms for over 25 years.
Our experienced team will use every resource available to help secure a favorable outcome for your case. We have successfully recovered over $350 million on behalf of our clients. Contact us today by completing our online contact form or giving us a call and setting up your free, no-obligation case evaluation with a member of our legal team.
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