How to File Unauthorized Trading Complaints Against Financial Advisors 252024544

How to File Unauthorized Trading Complaints Against Financial Advisors

Filing complaints against financial advisors for unauthorized trading can seem overwhelming. Yet, it’s crucial to know your rights as an investor and the steps you can take to protect your investments.

With the Financial Industry Regulatory Authority (FINRA) receiving numerous complaints each year, this article aims to simplify the process and offer practical advice on how to address unauthorized trading effectively.

I bring years of experience in handling securities fraud and investment disputes, giving me a unique understanding of the challenges investors face. My background equips me with insights into both regulator processes and effective strategies for recovering investment losses.

Stay tuned for expert guidance that could help safeguard your financial future.

Key Takeaways

  • Watch your account for any trades you didn’t approve. If you see something strange, it means there might be a problem.
  • Keep records of all your talks and emails with your financial advisor. This can help if you need to prove unauthorized trading happened.
  • Contact your financial advisor first if you notice unknown trades. They should explain what happened.
  • File a complaint with FINRA online if talking to your advisor doesn’t work out. They investigate complaints against advisors.
  • Think about getting an investment fraud lawyer if you lose money from unauthorized trades. They can guide you on how to get back your lost money by going through the legal process or arbitration with FINRA.

Understanding Unauthorized Trading

Unauthorized trading involves trades made in a customer’s account without their explicit permission or knowledge. It can encompass various forms of securities transactions executed by a financial advisor without obtaining prior consent from the account holder.


Unauthorized trading happens when a financial advisor buys or sells securities without the investor’s prior approval. This practice goes against regulations and can lead to significant investment losses.


Unauthorized trading can take various forms and understanding them is crucial. Here are the different types:

  1. Churning: Excessive trading by a financial advisor to generate commissions without considering the client’s best interest.
  2. Unsuitable Investments: Recommending investments that do not align with the client’s investment objectives or risk tolerance.
  3. Front-Running: Trading securities based on advanced knowledge of pending transactions that will affect their price.
  4. Misrepresentation: Providing false information about an investment or its potential returns to induce a client to trade.

Understanding these types is essential in protecting yourself from unauthorized trading occurrences.

Importance of prior authorization

Prior authorization is a crucial step in safeguarding your investments. It ensures that any trades and transactions proposed by your financial advisor are explicitly approved by you beforehand, preventing unauthorized activities.

Timely verification through prior authorization acts as a protective measure for your investment portfolio, reducing the risk of potential misconduct or fraudulent actions by advisors or brokers.

This fundamental practice serves as a proactive defense mechanism, providing investors with greater control over their assets and enhancing investor protection within the regulatory framework of securities industry oversight.

Signs of Unauthorized Trading

Be watchful for sudden changes in account activity and unexplained trades. Notify if you fail to receive confirmations or statements regularly.

Sudden changes in account activity

Sudden changes in account activity can be a warning sign of unauthorized trading by your financial advisor. If you notice unexplained transactions or unusual fluctuations in your portfolio without prior authorization, it may indicate potential misconduct.

For instance, abrupt shifts in investment strategies or sudden sales/purchases of securities could signal unauthorized trading. Being vigilant about these irregularities and promptly addressing them is crucial to safeguarding your investments.

– Suspicious or unexplained trades

Suspicious or unexplained trades

If you notice unusual or unexplained trades in your account, it could be a sign of unauthorized trading. This might include transactions that you did not approve or understand, and can result in significant financial losses for investors.

It’s essential to stay vigilant and regularly review your investment activity to spot these suspicious trades early on.

Another indication of suspicious trades is if you fail to receive trade confirmations or account statements after making an investment. Without these documents, it becomes challenging to keep track of your investments and assess their performance accurately.

Therefore, any discrepancies or irregularities should prompt immediate action towards protecting your investments.

Failure to receive confirmations or statements

If you fail to receive confirmations or statements after making a trade, it could indicate unauthorized trading. It is advisable to stay attentive and make a formal complaint immediately if confirmation of your trades or account statements are not sent regularly by the brokerage firm.

How to Protect Yourself from Unauthorized Trading

Protect yourself by monitoring your account regularly, keeping detailed records of all advisor communications, and establishing clear authorization guidelines. Read on for more insight into protecting your investments.

Regularly monitor your account

Regularly review your account statements for any unusual activity, such as unauthorized trades or unexpected changes. Keep an eye out for any irregularities and discrepancies in your account records that may indicate potential misconduct or unauthorized trading by your financial advisor.

Maintaining a proactive approach to monitoring your account can help you identify and address any issues promptly, protecting your investments and financial well-being.

Keep detailed records of all communications with your financial advisor

Ensure you document all conversations, emails, and meetings with your financial advisor. These records can provide crucial evidence if you suspect unauthorized trading or any misconduct.

You can easily track communications by keeping a file for all correspondence and notes related to your investments. Additionally, this documentation may prove valuable when filing a complaint or seeking legal assistance for investment losses.

Now let’s explore the steps to take when filing a complaint about unauthorized trading against a financial advisor.

Establish clear communication and authorization guidelines

To ensure clear communication and authorization with your financial advisor, maintain detailed records of all interactions. Regularly review and update your contact information, including email, phone numbers, and mailing address.

Clearly outline the parameters for trading and obtaining authorization for any adjustments to your investment portfolio. Be vigilant in understanding the terms of engagement with your financial advisor and establish a methodical approach to monitoring account activity with regular reviews.

Additionally, consider utilizing secure electronic communication methods such as encrypted email or client portals provided by brokerage firms to enhance security measures in place.

Steps to Take When Filing a Complaint

Contact your financial advisor directly to address the issue and seek resolution. Consider filing a complaint with FINRA or consulting an investment fraud lawyer for further assistance.

Contact your financial advisor

If you suspect unauthorized trading, start by contacting your financial advisor. You can express your concerns and request an explanation for any suspicious activity in your account.

Your financial advisor should provide clarity and guidance on the next steps to address the issue.

Once you’ve contacted your financial advisor, it’s essential to consider filing a complaint with FINRA or seeking legal advice if necessary. Taking prompt action will help protect your investments and ensure that any unauthorized trading allegations are thoroughly investigated.

File a complaint with FINRA

If you encounter issues with your financial advisor that cannot be resolved directly, you may need to file a complaint with FINRA. You can do this by navigating to the FINRA website and clicking on the “Have a Problem?” link in the header.

Once there, follow the instructions for filing a formal complaint online against your financial advisor or brokerage firm.

After contacting your financial advisor and finding no resolution, it’s crucial to utilize FINRA’s resources and processes for filing complaints against brokerage firms and their employees.

Consider hiring an investment fraud lawyer

If you’ve experienced unauthorized trading or investment fraud, hiring an investment fraud lawyer can be crucial. An experienced lawyer can help you understand your legal rights, navigate the complexities of securities law, and seek recourse for your losses through arbitration or litigation.

They have a deep understanding of regulatory agencies like FINRA and can provide tailored guidance to protect your consumer rights and pursue recovery from broker misconduct. Expert legal representation is key in uncovering securities fraud and embarking on a path towards recovering your investment losses while ensuring that you are well-equipped to address the ever-evolving realm of financial services.

Seeking professional assistance from an investment fraud lawyer is not only advisable but also designed to enhance your chances of successfully resolving disputes with brokerage firms or individual financial advisors.

Recovering Your Investment Losses

Prove unauthorized trading and recover damages to rebuild your investment portfolio. Seek appropriate legal help for recovering your investment losses.

Proving unauthorized trading

To prove unauthorized trading, you need to gather evidence such as trade confirmations, account statements, and any communication with your financial advisor. If the trades in question were not authorized by you or violated agreed-upon terms, this documentation will help support your case.

Additionally, seeking assistance from an investment fraud lawyer who specializes in securities fraud complaints against financial advisors can bolster your claim and increase the likelihood of recovering your investment losses through legal recourse.

By engaging a reputable firm like SSEK Law Firm that understands the complexities of unauthorized trading dispute resolution and has a track record of successful recovery of damages for clients in similar situations, you can receive tailored guidance towards proving unauthorized trading and rebuilding your investment portfolio.

Recovering damages

Proving unauthorized trading is crucial in recovering damages. Evidence such as trade confirmations, account statements, and communication records can support your case. Seeking legal assistance from investment fraud lawyers may also strengthen your position.

After recovering damages, consider rebuilding your investment portfolio to regain financial stability.

– Rebuilding your investment portfolio

Rebuilding your investment portfolio

To rebuild your investment portfolio, consider diversifying your investments across different asset classes such as stocks, bonds, and real estate. Explore investment opportunities in sectors or industries that show long-term growth potential.

Rebalance your portfolio regularly to maintain the desired allocation of assets according to market conditions and financial goals. Seek professional advice from a certified financial advisor to create a strategic plan that aligns with your risk tolerance and investment objectives.

Stay informed about economic trends and regulatory changes impacting the financial markets to make well-informed decisions.


Unauthorized trading in your account can be scary. You want your investments safe. Knowing how to spot and report this is key. If you see trades you didn’t okay, act fast.

Keep a close watch on your account. Any weird activity could be a sign. A sudden jump in buying or selling? Trades that don’t fit your goals? These are red flags.

Talk to your financial advisor first if things seem off. They might explain what happened. If not satisfied, FINRA’s complaint process is there for you. Hiring a lawyer who knows investment fraud might also help.

Getting back lost money involves proving the unauthorized trades first. Then, you aim to show these trades hurt your investments. Rebuilding your portfolio carefully comes next.

Filing complaints against advisors needs understanding certain steps and options available to solve the issue effectively.


1. What should I do if my financial advisor makes trades without my permission?

If your financial advisor makes unauthorized trades, you can file a complaint about this broker misconduct. Start by reporting the issue to the investment company they work for and then escalate it to regulators.

2. How can I recover losses from unauthorized trading?

To recover investment losses caused by unauthorized trading, follow the complaint process set by FINRA or contact a regulator who handles complaints against investment professionals.

3. Where do I report misconduct by an investment professional?

Report any misconduct or unauthorized trade resolution process to FINRA through their complaint process or directly to the regulatory body overseeing investment professionals in your area.

4. Can education help me avoid issues with financial advisors in the future?

Yes, investor education is key to understanding how to protect yourself from financial misconduct and what steps to take if you suspect unauthorized trading or other types of broker misconduct allegations.

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