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What to Do If You Suspect Your Stockbroker of Unauthorized Trading

Unauthorized trading involves the sale or purchase of stocks without your expressed consent before the trade. A stockbroker must obtain prior authorization for trades he or she makes on your account unless they have discretionary or “de facto” trading authority to do so without your explicit permission, or it’s a margin account. A margin account is when the broker lends you the amount to buy stocks or other products.

Some brokers may complete a trade transaction first and then notify you, and that’s unacceptable and unethical trading practices. In some instances, if you did provide prior authorization for the trade, you may still have legal recourse for stockbroker fraud or investment fraud.

Our Orlando stock market fraud attorneys can help you navigate the complicated process of these claims. These steps will help you identify unauthorized trading and other areas of stock market fraud so you can pursue legal action. 

1. Review Your Statements and Trade Confirmations for Questionable Activity

If something seems suspicious or you don’t understand an aspect of the reports or transactions, you need to act immediately to secure your finances and determine if there was misconduct. You should look over these statements and trade details regularly to protect your interests. You’re more likely to notice these discrepancies and unauthorized trading if you’re actively aware of your finances and investments.

2. Contact Your Stockbroker and Their Manager

You should contact your stockbroker about any questions or concerns you have after reviewing your statements and transactions. You may speak with their branch manager at the firm to investigate the issue further. Stockbrokers may initiate unauthorized trades for several reasons, but it’s often not done for your best interests. Most brokers who engage in illegal activities such as unauthorized trading, do so for their personal gain.

If you’ve suffered significant investment losses and the stockbroker reports that it’s due to overall market losses, you can compare yours to the S&P 500 Index to see if your damages are actually due to wrongdoing or stockbroker misconduct. You can also request that another broker or an experienced attorney review your account.

3. Contact a Stock Market Fraud Attorney

The best way to handle unauthorized trading on your investments or other stock market misconduct is to contact an attorney who has ample experience in these claims. You must act immediately to help your potential claim against the stockbroker. Quickly addressing your concerns will mitigate your financial losses and prevent further damage to your investments. There are also statutes of limitations that can prevent you from pursuing legal action if you wait too long to file a claim. 

Unauthorized trading is just one of many tactics stockbrokers may use to line their pockets. Our attorneys at Colling Gilbert Wright have helped countless clients pursue compensation for stock market fraud and have decades of success and experience.

If you suspect you’ve been the victim of unauthorized trading or other types of stock market fraud, contact us in Orlando today at (407) 712-7300 for a free consultation. We serve clients in nearby areas of Florida and nationwide.