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What is considered unauthorized trading in investing?


Investing is a fantastic thing. It can help you make more money with what you already have and it can help you to get a great return. That being said, unless you are a trader yourself, you might need the help of a broker to buy and sell stocks. When you put trust in a broker, it is their job to make trades and sales that you approve of. If your broker has taken part in any fraud, a great lawyer might be able to help recover your losses.

What is Investor Fraud?

It is helpful before you get into specific examples of fraud, to get a better definition of what investor or investment fraud really is. Investment fraud is any offer of false or overly fraudulent claims that are used to get investments or loans that are not totally true. This means that an investor, your broker for example, might tell you that an investment is a sure thing and that you are going to get a huge return from your investment, when there really is not an investment or it is not going to do what they claim it will.

This is a slippery slope, as so many investments can be considered risky, but not necessarily fraudulent. If you are dealing with a broker and you suspect that they are making fraudulent investments on your account, it is always best to first talk to them and ask them to show you your account then move forward and potentially take further action by appealing to the firm that they work for, and even the law in some cases.

What is Unauthorized Trading?

When you enter into an agreement with a broker or a brokerage you are agreeing to allow the broker to make trades and buy and sell on your behalf. In order for this to work, the broker and the brokerage has to provide you with contracts that authorize the broker to act on your behalf. In most cases, the contracts are going to give the broker the ability to trade on your behalf, but only once you have been made aware of the trade and have approved or authorized it.

This is where the unauthorized in unauthorized trading comes in. Even if they have the power to make trades on your behalf, they do have to let you know and they do have to have some acknowledgement or agreement from you for those trades. This does a few things. For starters, it keeps a trader from making trades that are unsound, that you do not agree with, or that are not one that you would be ok with.

It also keeps these traders from making trades that they think are good, when they might not be. It helps to keep the broker accountable for the trades that they are making and it also helps to keep you as the investor in the loop about what is happening with your money. Instead of being a free for all where the trader just makes the trades that they want, they do have to contact you and ask you what trades you are ok with and what trades you would rather them not make.

This is going to help you know just what is happening with your money at every juncture. It is also going to help you keep on top of what money you are making and what money you might not be making. THs is a part of the contract that you and your broker are going to sign when you enter into an agreement with them and with their firm.

It is also going to help with liability. By asking you about each investment, they are going to be keeping themselves from any liability if the investment goes sideways or if it does not pan out the way that you thought it would. By having that written agreement that you were ok with the investment, if something does go wrong, you cannot come back and say that it was their fault that the money was lost or that you did not ok the investment. This ensures that you are aware of everything that is happening and that if something does go wrong, you take some of the risk as well.

Why is Unauthorized Trading Considered to be Investor Fraud?

Unauthorized trading is considered to be investor fraud for a few reasons. First, the agreement that you sign with your broker states that they are going to show you every investment and make sure that you agree with it before they go ahead with the investment. It also states that they are going to make the investments that you want and that they are also going to ensure that you are fully aware of all your investments and what is happening with your money.

It is also considered to be fraud as it is their taking liberties with your money and making these investments without your knowing. If you are dealing with a broker that is not doing what you have asked them to, or if they are making trades without asking you what they should or should not do, it is always best to take the time to really go and ask your broker about the trades that they are making and about your account.

Your broker is meant to make sure that you are aware of all the things that go on with your account. If you ask for a statement of the money in your account so that you can see what has been done, they are required to show it to you. It is always best that you take the time to talk to your broker and see what is going on and to be aware of your money and how it is moving.

It is important that if you suspect that your broker is not using your money wisely, or if you suspect that they are making investments without your knowledge, that you take the time to confront them and ask for a statement of what is going on with your account so that you can see what has happened and so that if there are issues, that you are able to move ahead with criminal charges if needed.

Fraud is a breach of trust between you and your broker and it does make it so hard to figure out where to go next. Investor fraud is something that can lead to a loss of their license, fines, and even criminal charges in some cases.

How to Get Your Money Back?

There are so many things that you may be wondering if you are experiencing investor fraud. It can be hard to figure out what to do next and it can be difficult to believe that you are ever going to get your money back. There are some things that you can do to help ensure that you are going to get your money back and that you are going to be able to get those investments back from those fraudulent investments.

You will first need to contact an attorney. An experienced lawyer or team that has handled investor fraud are going to take steps to figure out what was done and figure out how to reverse it. They will first start to talk to you about what happened and what you suspect. They will then need to see the statements of your account so that they can go down through the account and see what was going on.

They will also talk with the police and see if there was actually criminal events that took place. Your attorney will work to create a case to prove that there was some form of fraud that took place and that the broker you were using broke your trust and then caused you to lose the money as a result of that fraud.

In some cases you can get your money back from investor fraud. In some cases, the money is not going to be recoverable. In cases where you are not able to get the money back as it was, you may be able to get some form of a settlement from the broker themselves if they do end up going to court. Some brokerages do have insurance to cover this type of event and they may be able to help you get your money back so that you can move on and so that you can then start to use your money for investments that you actually want to make.

It is the job of your broker to make the most of your money, not to break your trust and to take advantage of the money that you have put forth for them to help grow. If you suspect investor fraud or misconduct, it is important that you take the time to talk with the brokerage and to take the time to file criminal charges if there are any to make them accountable.

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