Unauthorized Trading

Before a stockbroker, brokerage firm, or investment advisor can make an investment on behalf of their clients, they must obtain their clients’ permission.  Without permission from the client, the investment professional cannot legitimately make an investment on the client’s behalf.  If the professional chooses to make the investment without the client’s consent, he/she will be partaking in unauthorized trading.

The only way an investment professional can legitimately make an investment on behalf of the client without the client’s consent is with a “trading authorization” contract.  If the broker has a “trading authorization” contract with the client, the broker can bypass the authorization process and move forward with transactions.  Without “trading authorization”, the broker must always make it a point to consult with their client and obtain permission before moving forward with any possible investments.  This ensures that the client remains in complete control of his/her investments.

In some cases, a broker may take it upon him/her self to make investment decisions on the client’s behalf without first consulting the client.  This is usually a sign of inexperience and is also a clear violation of the broker’s fiduciary duties as regulated by the SEC.  This is why people must always be vigilant about following their investments and monitor the behavior of their hired investment professionals.

Once a it is discovered that a broker has participated in unauthorized trading, it is always beneficial for the client to seek legal counsel and to terminate the business relationship with his/her broker.  Unauthorized trading is a serious offense and can lead to significant loss for the client.  When a broker participates in unauthorized trading, he/she is violating SEC policies and their client’s trust, and should be held liable for any losses the client incurs due to his/her negligence.  

Los Angeles Securities Attorney

The Law Offices of Jonathan W. Evans is a California based law office assisting clients nationally and worldwide with securities matters.  If you have questions regarding unauthorized trading, Attorney Jonathan W. Evans can help you.  Attorney Evans has significant securities litigation experience and is extremely knowledgeable in this complex area of law.  By working with Los Angeles securities lawyer, Jonathan W. Evans, clients can contest their illegitimate losses and ensure that their finances remain secure.

Call the Law Offices of Jonathan W. Evans today at (800) 699-1881!

Contact our office for a free consultation.