Unauthorized Stock Trade and Churning Attorneys
Churning and Unauthorized Stock Trade
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Your stockbroker is never authorized to trade (buy stock or sell stock) in your account without your expressed written authorization. Unauthorized stock trade is illegal and can be the basis for a claim of stock fraud against the broker and the stock broker's firm.
One strategy often used by brokers is to buy securities for your account and, when you call to complain, the broker will try to convince you to keep the securities because they have increased in value, or will increase in value. Another common excuse is that there was a "computer error" or "clerical mistake" and they will get it straightened out. If you hear this excuse, you should be hypersensitive because your broker may try to cover his or her tracks. It may also be an indication of other fraudulent or illegal activity in connection with your investment account.
Another related scheme is known as "churning". Churning occurs when your broker convinces you to make multiple trades in your account - "in and out" trades, buying and selling securities in a relatively rapid manner. Most investors should be buying and holding their investments over a period of time. Rapid trading and churning is a fraudulent scheme for the broker to generate more commissions for himself or herself and often has little or no benefit to you - in fact, in many situations, churning actually loses money for your account.
If you have been the victim of unauthorized trading or churning, call us. If you fail to act on an unauthorized stock trade, you may be deemed to have tacitly approved the trades. It will be harder to obtain justice later if the value of the securities declines since you allowed the securities to remain in your account after you knew they were there.
If you or a loved one has been harmed by unauthorized stock trade or churning securities investments, please call or email our experienced churning and unauthorized stock trade attorneys today. We'll evaluate your claim for free and help you get the justice you deserve.
