What to Do if Your Financial Advisor Sold Stocks without Telling You
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As reported in InvestmentNews, three Raymond James entities have agreed to pay over $15 million to resolve an investigation by the SEC. The settlement and SEC order focused on Raymond James’s actions in improperly charging certain clients advisory fees when the...read more
Selling stocks is a key duty for stockbrokers and other financial professionals. However, that does not mean investment advisors and brokers have the right to sell stocks indiscriminately. On the contrary, it is generally unlawful for a stockbroker or financial advisor to sell stocks or other securities without obtaining the investor’s permission in advance. Making a sale without obtaining the necessary authorization may constitute a serious violation of the state laws, federal laws, and/or industry regulations that govern brokerage firms and financial professionals. If your stockbroker or financial advisor sold stocks or other securities out of your account without notifying you in advance, and you or your business sustained serious financial losses as a result, you should immediately begin exploring your legal options with an experienced FINRA arbitration attorney. With swift and strategic legal action, it may be possible to recover compensation for the losses you sustained due to the unauthorized sale.
What Are My Legal Options if My Broker or Financial Advisor Sold Stocks without Permission?
Brokers and financial advisors are not permitted to sell (or purchase) stocks without obtaining the investor’s authorization. Moreover, even if the investor does grant advance authorization for the advisor to use his or her discretion when selling stocks, the advisor must only make transactions that align with the investor’s investment profile, which takes into account variables such as the investor’s age, level of investing experience, willingness and financial ability to assume financial risks, need (where applicable) to liquidate assets, general financial goals, and other important factors that brokers and financial advisors must consider. Failure to do so is known as recommending unsuitable investments, which an unsuitable investments lawyer can investigate.
If a broker or financial advisor sells stocks without obtaining the investor’s permission, or causes the investor to sell stocks in a way that contradicts the investor’s investment profile, the investor can sustain serious financial losses. No investor wants to find themselves in this situation. Fortunately, if the worst does occur, investors may turn to an organization known as the Financial Industry Regulatory Authority, or FINRA, for legal support.
Though not technically a government organization, FINRA is, in its own words, “authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly.” This entails regulating FINRA members, which currently include more than half a million brokers, brokerage firms, and other financial professionals/organizations throughout the United States. When an investor has a dispute with his or her broker, and the dispute cannot be resolved without professional intervention, the investor may file a FINRA claim with assistance from a FINRA lawyer, who can work to ensure that the claim is prepared and filed in a clear, thorough, and timely fashion.
Filing a FINRA claim will begin a dispute resolution process. This process may entail mediation or arbitration, depending on the nature of the dispute. Arbitration strikes a middle ground that is more formal than mediation, but less rigid (and less costly) than litigation, making it a popular method of dispute resolution among investors. When you contact our unauthorized trades lawyers for your free legal consultation, we can help determine whether mediation, arbitration, or litigation would be ideally suited for bringing your matter to an efficient close.
As a final word of caution, investors should note that filing a claim is not the same as filing a complaint. As described above, the former initiates the dispute resolution process (and critically, opens the door to potential compensation), whereas the latter simply involves submitting a complaint form online. Even if the complaint results in disciplinary action, fines, or other sanctions against the advisor, it may not result in recovery of compensation. If your goal is to be reimbursed for financial losses resulting from the unauthorized sale (or purchase) of stocks or other securities, you are advised to discuss the possibility of filing a FINRA arbitration claim with assistance from an attorney.
FINRA Arbitration Attorney Handling Unauthorized Trades Claims for Investors
The FINRA arbitration attorneys of Epperson & Greenidge, P.A. have years of experience assisting investors who were defrauded by their stockbrokers, investment advisors, or other financial professionals. Representing investors before FINRA arbitrators and FINRA arbitration panels, our knowledgeable unauthorized trades attorneys handle a wide array of claims and lawsuits related to the unauthorized sale and/or purchase of stocks, bonds, and other securities, including disputes arising from fraud and identity theft, trade churning (excessive trading), and the recommendation of unsuitable investments. To learn more about how our law firm can help you if you were the victim of securities fraud, contact us online for a free legal consultation, or call the law offices of Epperson & Greenidge, P.A. at (877) 445-9261 right away.