Unauthorized Investments
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Another common form of investment fraud involves a broker who made unauthorized trades with client funds. In some cases, the broker simply failed to ask a client for permission to make trades in a nondiscretionary account. In other circumstances, the broker bought stock on margin without authority, or ignored a client’s specific instructions about a discretionary account. A broker must have the express detailed permission of the client for all trades. This authority only exists when a client signed a written contract in advance, which specifically granted permission to the brokerage firm to make certain trades without prior approval. Absent this type of arrangement, a firm is required to obtain the client’s permission for each transaction. Depending on the facts of the particular case, unauthorized trading can result in claims for rescission, breach of contract, or fraud.
If you believe that you have been the victim of investment fraud or broker misconduct, it is important to talk with a Michigan investment fraud lawyer today. Please submit a simple, free and confidential legal consultation form now. |
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