Unauthorized transactions are trades your broker makes in your account without your prior permission or authorization. However, if you have a margin account and the value of the account falls below your firm's requirements, your broker may be able to sell your securities without consulting you first. This would not be an unauthorized transaction if your account agreement allows your broker to sell your securities, even without notice to you, to collect the money you have borrowed.

The major securities industry self-regulatory organizations have rules prohibiting unauthorized transactions. The NASD's unauthorized trading rule is Rule 2310-2(b)(4)(iii).  The New York Stock Exchange's unauthorized trading rule is Rule 408(a).

To learn more about unauthorized transactions call us at 1-800-294-9198, or contact us online.