Solicited vs. Unsolicited Trades: Understanding the Difference and Your Rights

When reviewing your brokerage account statements, you may notice that each transaction is marked as either “solicited” or “unsolicited.” While these labels may seem like industry jargon, they carry significant legal and regulatory meaning—especially if you’ve suffered investment losses and are considering a FINRA arbitration claim.

At Iorio Law PLLC, we believe informed investors are better equipped to protect their rights. Below, we explain the differences between solicited and unsolicited trades, how they impact your case, and what to do if you suspect broker misconduct.

What is a Solicited Trade?

A solicited trade occurs when your broker or financial advisor recommends or suggests a specific investment transaction, and you agree to proceed with that recommendation.

In regulatory terms, this means the broker “solicited” the trade. The recommendation could be:

• Buying or selling a specific stock, bond, mutual fund, option, or other security.
• Reallocating your portfolio to include a particular product.
• Entering into a complex investment strategy such as options spreads or leveraged ETFs.

When a trade is solicited, your broker’s duties are heightened:

• Suitability and Best Interest: The recommendation must comply with FINRA’s suitability standard and, for retail customers, Regulation Best Interest (Reg BI).
• Disclosure: The broker must fully disclose all material facts, risks, costs, and conflicts of interest.
• Supervision: The brokerage firm must reasonably supervise the recommendation to ensure compliance with industry rules.

If the recommendation was unsuitable, misleading, or driven by commissions rather than your best interest, you may have a claim for recovery.

What is an Unsolicited Trade?

An unsolicited trade is initiated entirely by the investor, without any suggestion or recommendation from the broker. This means you—rather than your broker—made the decision to buy or sell a security, and the broker simply executed your instructions.

Examples of unsolicited trades include:

• You call your broker to place an order for a stock you researched independently.
• You place an online order through your brokerage account without any broker input.

In an unsolicited trade, the broker generally has less responsibility for the investment decision because they did not recommend it. However, they must still:

• Accurately execute your order.
• Avoid misrepresenting or omitting material facts if they provide any information.
• Ensure the trade complies with your account’s restrictions (e.g., no margin trading if your account is not margin-approved).

Why the Distinction Matters

The solicited vs. unsolicited classification can play a critical role in a FINRA arbitration case. For solicited trades, the brokerage firm is directly responsible for the recommendation’s suitability and compliance with Reg BI. For unsolicited trades, the firm may argue it had no such obligation because you initiated the transaction.

However, this distinction is not always clear-cut:

• Misclassified Trades: Brokers sometimes mark trades as “unsolicited” to avoid regulatory scrutiny—even when they actually recommended the investment.
• Pattern of Influence: If a broker regularly “educates” you on certain securities or strategies that lead you to place the order, arbitrators may still view the trade as solicited.
• Mixed Recommendations: A broker might recommend a particular investment but allow you to decide the timing, later marking the trade as unsolicited.

In these situations, careful analysis of communications, emails, and call notes can reveal whether the trade was truly unsolicited.

Red Flags and Potential Misconduct

Be alert for signs your trades may have been improperly classified:

• Trades you don’t remember initiating yourself.
• A broker claiming you placed an order independently when you recall them recommending it.
• Repeated high-commission or risky trades marked as “unsolicited.”
• Account statements showing patterns inconsistent with your stated investment goals.

Protecting Your Rights

If you suspect a trade has been misclassified or that your broker recommended unsuitable investments, take these steps:

1. Review Account Statements or Confirmation Statements – Look for “SOL” (solicited) or “UNSOL” (unsolicited) designations next to each trade.
2. Request Written Records – Ask your brokerage firm for all notes, emails, and order tickets related to disputed trades.
3. Check Your Risk Profile – Compare the trades to your stated investment objectives and risk tolerance on file with your broker.
4. Consult an Experienced Securities Arbitration Attorney – At Iorio Law PLLC, we can review your trades, determine if they were improperly classified, and pursue recovery through FINRA arbitration.

How Iorio Law PLLC Can Help

We have represented investors nationwide in cases where trade classifications were at the heart of the dispute. Our experience in unsuitable investment recommendations, unauthorized trading, and misrepresentation claims allows us to build compelling cases even when brokers attempt to shield themselves by labeling trades as “unsolicited.”

If you believe you have suffered losses due to solicited trades that were unsuitable—or unsolicited trades that were misclassified—contact us today for a free, confidential consultation. We work on a contingency-fee basis: no recovery, no attorney’s fees.

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📧 Email: info@iorio.law
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