Unauthorized Trading
If you’ve noticed strange trades in your investment account that you didn’t approve, you might be dealing with unauthorized trading. This is a serious issue where a broker or financial advisor buys or sells securities without your permission. It can lead to big investment losses and shake your trust in the system.
At Varnavides Law, we stand with investors like you who have been harmed by these actions. Our firm focuses on helping victims recover what they’ve lost through clear, strong legal support. With years of experience in securities litigation and investment fraud, we’re here to guide you every step of the way.
Unauthorized trading is more common than many people think.
It often happens when brokers put their own interests ahead of yours, chasing commissions or hiding mistakes.
If this sounds like what you’ve gone through, you’re not alone. We’ll explain what unauthorized trading is, how to spot it, and why working with an experienced unauthorized trading lawyer can make a difference. However, this content is for informational purposes only and does not constitute legal advice.
If you need help, you can contact our unauthorized trading lawyer.
Our goal is to pursue the recovery you may be entitled to through a clear, proactive legal strategy.
What Is Unauthorized Trading?
Unauthorized trading occurs when a broker or investment professional makes trades in your account without your knowledge or consent. This violates basic rules set by organizations like the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission (SEC).
Brokers have a duty to act in your best interest, but sometimes they don’t.
There are a few types of accounts where this can happen. In a non-discretionary account, which most investors have, every trade needs your approval.
But in discretionary accounts, brokers have more freedom to make decisions without asking each time. Even then, they must follow your overall goals and not take unnecessary risks.
Common examples include:
- Buying high-risk stocks you never discussed.
- Selling shares to cover the broker’s errors.
- Trading frequently to generate commissions, also known as churning.
This misconduct is a form of broker fraud and can tie into larger issues like investment fraud or breach of fiduciary duty. If your stockbroker traded without permission, it could be grounds for a claim.
At Varnavides Law, we’ve seen how these actions devastate retirement savings or family funds. We work to hold brokers accountable through securities arbitration or court proceedings.
Understanding the basics helps you see if your situation fits. Brokers must get your okay for trades, usually in writing or recorded calls. Without that, it’s unauthorized and illegal.
Signs You May Be a Victim of Unauthorized Trading
Spotting unauthorized trading early can save you from bigger losses. Here are some red flags to watch for in your statements or interactions with your broker.
First, look for trades you don’t remember approving. If you see buys or sells that surprise you, that’s a big sign. Brokers might say it was a mistake, but often it’s not.
Another clue is unusual activity in your account. Maybe there’s more trading than usual, or investments that don’t match your risk level. For example, if you’re a conservative investor but suddenly own volatile options, something’s wrong.
Communication issues are common too. If your broker avoids your calls or gives vague answers about trades, trust your gut. Also, watch for unexpected fees or commissions that seem high for the activity.
In some cases, unauthorized trading links to other problems like unsuitable investments or margin account abuse. Margin accounts let you borrow to trade, but without permission, it can lead to huge debts.
If you’ve lost money and suspect foul play, document everything. Save statements, emails, and notes from talks with your broker. This evidence is key for building a case.
At Varnavides Law, we review these signs with you during a free consultation, reassuring you that you’re not alone.
The Impact of Unauthorized Trading on Investors
The effects of unauthorized trading go beyond just money. It can cause stress, damage your financial plans, and erode trust in advisors.
Financially, losses can be severe. A bad trade might wipe out gains or dip into your principal. For retirees or those saving for big goals, this sets back years of planning.
Emotionally, it’s tough. Feeling betrayed by someone you trusted hurts. Many victims worry about their future security.
There can be tax issues too. Unauthorized sells might trigger capital gains taxes you weren’t prepared for.
In worst cases, it leads to over-concentration—too much money in one risky area—or churning, where excessive trades rack up fees.
But there’s hope. With the right unauthorized trading lawyer, you can seek recovery. FINRA arbitration often resolves these disputes, and settlements can cover losses plus damages.
We’ve helped investors rebuild after these setbacks.
Our approach is straightforward: we assess your case, gather evidence, file claims, present proof in arbitration, and cross-examine witnesses to pursue fair recovery.
Your Legal Rights as an Investor
As an investor, you have strong protections against unauthorized trading. FINRA and SEC rules require brokers to get your consent and act ethically.
Key rights include:
- The right to approve all trades in non-discretionary accounts.
- Protection from breach of fiduciary duty, where brokers must prioritize your interests.
- Ability to file complaints with FINRA or sue for securities fraud.
If unauthorized trading happens, you can pursue compensation for losses, fees, and sometimes punitive damages.
Time matters—claims have statutes of limitations, often a few years from discovery.
We also handle related issues like insider trading allegations or pump-and-dump schemes if they connect.
At Varnavides Law, we explain these rights simply. You’re entitled to fair treatment, and we’ll enforce that.
How Our Unauthorized Trading Lawyer Can Help
Varnavides Law specializes in representing victims of investment fraud, including unauthorized trading. Gary Varnavides brings deep experience in securities litigation across the U.S., combined with his real-world business ownership insights, to advocate effectively for your recovery.
We start with a clear assessment of your case. No jargon—just honest advice on your options.
Our process:
- Review your account statements and communications.
- Build evidence for FINRA arbitration or court.
- Negotiate settlements or litigate if needed.
We’ve recovered for clients in similar situations, focusing on broker misconduct and unsuitable trades.
What sets us apart: We’re client-focused, with a track record in complex cases.
If you’re facing unauthorized trading, let us help restore your peace of mind.
Steps to Take If You Suspect Unauthorized Trading
Don’t wait if you think something’s off. Here’s what to do:
- Document Everything: Gather statements, emails, and trade confirmations.
- Contact Your Broker: Ask for explanations in writing. Note their responses.
- Report to Regulators: File with FINRA or SEC. This preserves your claim.
- Consult a Lawyer: An unauthorized trading lawyer like us can evaluate for free.
- Freeze Your Account: If needed, stop further trades.
- Pursue Recovery: Through arbitration or lawsuit.
Acting fast protects your rights. We’ve guided many through this, making it less overwhelming.
Contact Us Today for a Free Consultation
If you’ve been hurt by unauthorized trading, don’t face it alone. Varnavides Law is here for individuals like you. Reach out for a free, confidential consultation. Gary will review your situation and outline next steps.
Call us or fill out our form—we’re ready to fight for you.
Frequently Asked Questions About Unauthorized Trading
What exactly counts as unauthorized trading?
It’s any buy or sell in your account without your permission. Exceptions exist for discretionary accounts, but even those have limits.
How do I prove unauthorized trading happened?
Use account statements, lack of approval records, and broker communications. We help gather and present this.
Can I recover my losses from unauthorized trading?
Investors may pursue recovery through FINRA claims or lawsuits, which can seek compensation for losses, fees, and interest, depending on the specifics of the case.
What's the difference between unauthorized trading and churning?
Churning is excessive trading for commissions, which can include unauthorized trades but focuses on frequency.
Does unauthorized trading always involve fraud?
Not always, but it often does if the broker benefited. It’s still a violation.
What if my broker says it was a mistake?
Mistakes happen, but repeated ones or those causing loss may still be actionable.
Can unauthorized trading affect my taxes?
Yes, unwanted sells can create tax liabilities. We consider this in recovery.
