A financial advisor with Morgan Stanley has been punished for making sale transactions in an investor’s account, without the investor’s consent. Shawn Richardson forced the investor to commit to selling his securities, which had a combined value of $138,137.47.
FINRA prohibits an advisor from taking action on an investor’s behalf without the investor’s written consent. Additionally, advisors are required to act using “high standards of commercial honor.” Richardson and the investor had previously discussed selling the securities. However, the investor never agreed on the time or price of the sale. Furthermore, the investor never gave Richardson permission to sell the securities on his behalf. Richardson deliberately violated FINRA rules by acting without the investor’s consent. He has been disciplined and fined for his misconduct.
By making sale transactions in the investor’s account without permission, Richardson engaged in unauthorized trading. This occurs when a broker buys or sells securities without prior consent from the investor. Unauthorized trading is something an investor should be wary of because it can often be done to the detriment of the investor. A financial advisor may act without the investor’s consent for many reasons, one being to get commissions. Therefore, there may be a large incentive to buy and sell securities, even if it will harm the investor.
Investors can protect themselves from unauthorized trading by carefully checking their monthly account statements. Furthermore, each time a transaction is made, the investor should receive a confirmation including all of the details of the trade — what was bought or sold, at what price, the date of the transaction, any commissions made by the financial advisor, and whether it was done at the request of the investor or financial advisor. It is important that investors review all account statements and confirmations to make sure that only approved transactions have been made.
If an investor is suspicious or has knowledge of unauthorized trading by their financial advisor, it is crucial to act quickly. Making a complaint as soon as possible conveys that the transaction was truly made without permission, and that the investor has not ratified the trade.
If your financial advisor has acted on your behalf without your consent, you may have a claim. Contact Investor Defense Law to see if you can recover your losses.
Investor Defense Law LLP is a law firm dedicated to helping investors in California, Georgia, and Washington recover losses caused by stockbrokers, financial advisers, or investment firms. To learn more, contact an investment fraud attorney at 800.487.4660.