Unauthorized Trading

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law booksStockbrokers are trusted by investors to handle their stocks in an honest manner.

However, there are certain situations when investors discover that their stockbroker has behaved fraudulently by engaging in unauthorized trading.

When this is discovered it’s important to retain the services of an attorney and take legal action.

Of course, there is risk when making any financial investment, but an investor expects that their stockbroker will minimize their risk. Their risk elevates greatly when the stockbroker engages in unauthorized trading.

Unauthorized trading is when a stockbroker trades your stocks without having expressed permission.

The only time a stockbroker may trade stocks without permission is when they have enacted a signed agreement with the investor.

Unfortunately, there are strict laws governing how stockbrokers may handle investments.

They must specifically document all transactions. Not only do they need to create documentation regarding transactions, they must also have expressed permission before completing them.

In fact, an investor must receive confirmation regarding the transaction within five days after the trade settles.

The best way to determine whether or not any unauthorized trading has occurred on your account is to begin by examining your monthly reports. By carefully scrutinizing these reports, you can be alerted to any unauthorized or unapproved activity.