You open your brokerage statement and see trades you do not recognize. Positions you never approved. Buys and sells that happened without your knowledge or consent. Unauthorized trading is one of the clearest violations of investor rights in the securities industry.
Haselkorn & Thibaut, P.A., operating as Investment Fraud Lawyers, helps investors recover losses caused by brokers who trade without permission. Our partners are former Wall Street defense attorneys. We know the rules firms are supposed to enforce and the excuses they make when they fail. Call 1-888-885-7162 for a free, confidential case review.
We work on a contingency basis — no recovery, no fee.
What is unauthorized trading?
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Unauthorized trading occurs when a broker executes transactions in your account without your express permission. In a non-discretionary account, the broker must obtain your approval before each trade. In a discretionary account, the broker must still act within the limits of the authority you granted and in your best interest.
The Financial Industry Regulatory Authority, or FINRA, prohibits brokers from exercising discretion without proper authorization. FINRA Rule 3260 requires written discretionary authority approved by the firm. Without that approval, every trade is unauthorized.
Signs you may be a victim of unauthorized trading
Unauthorized trading is often hidden in plain sight. Investors may not notice until they review statements carefully or try to understand unexpected losses.
| Warning sign | What it means | Possible dollar impact |
|---|---|---|
| Unfamiliar positions | Securities appear that you never discussed | Losses tied to unsuitable or volatile products |
| Rapid turnover | High number of trades in a short period | Commissions, fees, and market losses |
| Missing trade confirmations | Broker did not send required confirmations | Delayed discovery, larger losses |
| Changes to investment strategy | Account risk profile shifts suddenly | Concentration or margin-related losses |
How we build your unauthorized trading case
We start by comparing your account statements to your conversations with the broker. We look for trades that occurred without your approval. We also check for confirmations that were never sent. We look for changes to your investment profile that you did not request.
We then request the firm’s supervisory records, order tickets, and email archives. These documents often reveal whether the firm followed its own procedures or looked the other way.
Common situations involving unauthorized trading
Unauthorized trading appears in several patterns. Some brokers trade aggressively to generate commissions. Others chase losses after a bad recommendation. In some cases, a broker uses a client’s account to benefit a favored product or strategy.
We also see unauthorized trading in connection with Ponzi schemes and private placements. The broker may move client funds into an unapproved investment without consent.
What you can recover
Investors who prove unauthorized trading can recover the losses caused by the improper trades. They may also recover interest, fees, and costs. In some cases, the firm itself is liable for failure to supervise.
| Recovery category | What it covers |
|---|---|
| Out-of-pocket losses | The difference between account value before and after the unauthorized trades |
| Interest | Pre- and post-judgment interest allowed by the forum |
| Fees and costs | Arbitration fees, expert costs, and legal expenses in some cases |
| Punitive damages | Possible in egregious cases, depending on forum and state law |
Why choose our firm
We have handled hundreds of unauthorized trading claims. Our 98% success rate reflects our preparation and our willingness to take cases to a hearing when firms refuse to settle fairly. Because our partners defended brokerage firms earlier in their careers, we anticipate the defenses firms raise and counter them early.
Related practice areas
Frequently asked questions
What counts as unauthorized trading?
Any trade made without your express permission in a non-discretionary account is unauthorized. Even in a discretionary account, trades outside the granted authority or against your stated objectives may be improper.
Can I get my money back?
Yes, if we can prove the trade was unauthorized and caused a loss. We file FINRA arbitration claims against the broker and the firm for failure to supervise.
What evidence do I need?
Account statements, trade confirmations, emails, texts, and notes from conversations are all helpful. We also obtain firm records through discovery.
How long do I have to file a claim?
FINRA arbitration has a six-year eligibility rule, but shorter state deadlines may apply. Contact us as soon as you suspect a problem.
Will I have to go to court?
Most brokerage customer agreements require FINRA arbitration, not court. We represent clients through that process.
How much does it cost to hire you?
We work on a contingency basis. You pay nothing unless we recover funds. The initial consultation is free.
Why unauthorized trading is also a firm failure
A single unauthorized trade is bad. A pattern of unauthorized trading is almost always a sign that the firm failed to supervise. Firms are required to review trading activity, compare it to client instructions, and flag exceptions.
When firms ignore red flags, they become liable along with the broker. We pursue both the individual broker and the firm. Naming the firm often increases the pressure to settle and can expand the available insurance coverage.
Steps to take if you suspect unauthorized trading
First, save your account statements and any written communication with the broker. Do not confront the broker in a way that triggers document destruction. Second, request your complete account records in writing. Third, contact a securities attorney before the firm launches its own internal investigation.
Early legal involvement lets us preserve evidence and prevent the firm from framing the issue as a misunderstanding. We also make sure you meet FINRA eligibility deadlines.
What happens after you call us
When you call, we listen first. We want to understand what you noticed, when you noticed it, and what you have already done. We then outline a preliminary plan.
Our first steps include preserving your account records, analyzing the unauthorized trades, and calculating the losses. We also identify the firm supervisors who should have caught the activity. Within a few days, we can usually tell you whether a claim is viable.
This page is for informational purposes only and does not constitute legal advice. Past results do not guarantee future outcomes.