Unauthorized Trading

Unauthorized Trading Lawyers | Protecting Investors Nationwide

When you entrust your financial future to a broker or financial advisor, you expect transparency, honesty, and accountability. Unfortunately, unauthorized trading—a serious violation of investor trust—is an all-too-common occurrence. At Iorio Law PLLC, our experienced securities arbitration attorneys represent investors nationwide who have suffered losses due to trades executed without their knowledge or consent. We are dedicated to holding brokers and brokerage firms accountable and recovering your investment losses.

What I s Unauthorized Trading?

Unauthorized trading occurs when a broker executes buy or sell transactions in an investor’s account without the investor’s knowledge, authorization, or consent. This misconduct violates FINRA Rule 2010, which mandates that financial professionals uphold high standards of commercial honor and adhere to just and equitable principles of trade.

The key issue often revolves around whether the broker exercised discretionary authority appropriately. Under FINRA Rule 3260, brokers must have prior written authorization from the customer before making any discretionary trades. Brokerage firms are also required to approve the account for discretionary trading, providing documented proof of authorization.

Discretionary vs. Non-Discretionary Accounts: Key Differences

Discretionary Accounts

A discretionary account authorizes a broker to buy or sell securities without seeking approval for each transaction. While these accounts allow brokers to react swiftly to market opportunities, they also come with strict regulatory oversight to prevent misuse:

• Prior Written Authorization: Mandatory for brokers to trade on behalf of clients.
• Regular Reviews: Firms must regularly monitor transactions to ensure trades remain appropriate and beneficial.

However, even with a discretionary account, unauthorized trading may occur if a broker ignores explicit investor instructions or limitations. For example:

• Investing outside agreed asset classes (e.g., buying speculative stocks when restricted to conservative investments).
• Overconcentration of assets in specific securities or sectors against the investor’s wishes.

Non-Discretionary Accounts

In a non-discretionary account, the investor retains full decision-making authority, requiring brokers to obtain explicit consent before executing trades.  In other words, a broker must first obtain the customer’s permission before executing a trade. Unauthorized transactions are clear violations in these accounts.

While non-discretionary accounts typically involve lower fees, investors must remain vigilant. Any unauthorized trades, no matter the size, constitute serious misconduct and can be grounds for arbitration claims.

Recognizing Unauthorized Trading

Unauthorized trading can be subtle or overt. Common indicators include:

• Unexpected or unexplained trades in monthly account statements.
• Increased transaction frequency without your prior knowledge.
• Significant changes in trading patterns or investment strategies inconsistent with your instructions.
• Excessive commissions or fees resulting from unauthorized trading activity.

Legal Remedies for Unauthorized Trading

If you discover unauthorized trades, you have the right to pursue financial recovery through FINRA arbitration. Potential recoveries can include:

• Reimbursement for trading losses.
• Return of unauthorized trade commissions and fees.
• Interest and related financial damages.

Additionally, brokerage firms that fail to supervise their employees adequately may also be held accountable.

How Iorio Law PLLC Helps Investors

Led by August M. Iorio, an experienced securities arbitration attorney with nearly 15 years of experience and a proven track record recovering nearly $100 million for investors, our firm provides:

• Free Case Evaluation: Assessing your claim and determining your best legal strategy.
• Comprehensive Investigation: Thorough analysis of your account activity and broker interactions.
• Aggressive Arbitration Representation: Skillful advocacy in FINRA arbitration forums to secure maximum compensation.
• Contingency Fee Structure: No recovery, no fees—our interests are directly aligned with yours.

Why Choose Iorio Law PLLC?

• National Reach: Representing investors throughout the United States.
• Proven Results: Nearly $100 million successfully recovered for investors harmed by broker misconduct.
• Personalized Attention: Tailored legal solutions focused on your unique circumstances and financial recovery.
• Exclusive Investor Advocacy: We exclusively represent investors, never brokerage firms or financial advisors.

Take Action to Recover Your Losses

If you suspect unauthorized trading in your account, immediate action is critical. FINRA arbitration claims are time-sensitive, typically requiring filing within six years of the events giving rise to the claim.

Contact Iorio Law PLLC today for your free, confidential consultation. Our dedicated investor advocates are ready to fight for your rights and financial recovery.

☎ Call: (646) 330-4624 | ✉ Email: info@iorio.law | : Online Submission: Contact Form

📍Location: One World Trade Center, 85th Floor, New York, NY 10007 | Serving Investors Nationwide

Your financial security deserves vigilant protection. Let Iorio Law PLLC guide you to recovery.