In general, unless an investor has given written authorization for their broker to make transactions on their behalf without prior approval, a broker must get permission before they execute any orders. Unauthorized trading occurs when a broker purchases or sells securities in a customer’s account without first obtaining the customer’s consent.
If you have suffered a loss as a result of unauthorized trading, you could have a legal claim against the broker and/or brokerage firm. Even in cases where an investor has granted a broker authorization to make transactions on the investor’s behalf at the discretion of the broker, the broker cannot misuse or exceed that authority by making commissions from excessive trading or “churning,” recommending unsuitable investment strategies, or making trades the broker was not authorized to make. To do so is a violation of the broker’s duty to the investor and subjects the broker to liability for unauthorized trading. If you believe your broker has engaged in unauthorized trading, it’s best to contact an attorney who can help determine whether your investment loss was the result of unauthorized trading in your brokerage account.
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