Every purchase or sale of a security in your account must be approved in advance by you, unless you give the broker authority in writing to trade at his discretion. If your broker did not obtain your express written approval for each and every trade in your account, he may have engaged in unauthorized trading.
Discretionary trading authority can only be granted to a broker in writing – your verbal instructions, (or the instructions of your spouse if they are not co-owners or otherwise have power of attorney) to the broker to do whatever he deems appropriate does not legally authorize him to trade at his discretion. The only exception to this rule may be in a margin account. If you have a margin account and the value of the account falls below your firm’s requirements, your broker may be able to sell your securities without consulting you first if your account agreement allows your broker to sell your securities, even without notice to you, to collect the money you have borrowed.
If you believe that you have suffered losses from your broker’s unauthorized trading in your account, you have certain rights which you should be aware of, rights which may provide you an opportunity to recover your losses from your stockbroker or brokerage firm.
At Loya & Associates we can help. I represent victims of securities fraud. Please call or email me today.