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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4009
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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My broker put many unreal trades in my account, is that le

Resolved Question:

My broker put many unreal trades in my account, is that legal?
Submitted: 2 years ago.
Category: Tax
Expert:  Lane replied 2 years ago.
If you mean that your broker charged commissions when no trades were made (nothing was bought in your account and/or nothing was sold from your account) then yes, I would think that is illegal.

Now, if you're asking if it's legal for the broker to make trades without your permission, that would have to to with the contract you signed, either when you opened that account or at a later date.

This is called discretionary trading authority, and can be allowed when it was a part of the account or bundle of services you purchased.

Sometimes it comes at a later date and can sometimes be called a limited trading authority or LTA.

Sometimes it is also referred to as limited power of attorney for trading.

Do you remember signing something that allowed for discretionary trades OR that allowed the firm to trade your account based on a set of objectives?



Customer: replied 2 years ago.

I don't remember signing something about that because I applied online and I trade by myself

Expert:  Lane replied 2 years ago.
I would definitely call the customer service number and check it out.

They should be able to tell you right away what sort of authorizations you have on the account ... and any process for disputing something you did not authorize.

However, be ready to hear that it may have been one of those check-boxes or "I AGREE" statements that you went through when opening the account.

It's also possible that someone has hacked your account and is trading without you permission.

Calling the customer service number would be the most efficient, but if it's an online broker, you should also have a message center and/or a chat box ... to ask for copies of everything you have signed, electronically or otherwise.

But, again, a quick phone call to the customer service number would probably be the most efficient.

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4009
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 6 other Tax Specialists are ready to help you

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