A broker who trades without your authorization has violated FINRA rules, full stop — there is no “I tried to reach you” exception. A broker who trades excessively, generating commissions or fees out of proportion to any reasonable strategy, is churning the account. Both are easier to get away with when the customer is asleep during market hours and reads statements weeks later. Both are also easy to prove from the records: trade confirmations, turnover ratios, and cost-to-equity calculations tell the story without anyone’s recollection.
Recognize it
You may have this claim if
- Trades on your confirmations that you did not discuss or approve
- Frequent buying and selling of the same or similar positions
- Commissions, markups, or fees that add up to a large percentage of the account each year
- A broker who was hard to reach but the account was always active
- A balance that declined while the broker reported “activity” or “repositioning”
The rule
What the firm owed you
Unauthorized trading violates FINRA Rule 2010 and the firm’s own account agreement unless you granted written discretion. Excessive trading is addressed by FINRA Rule 2111 and Regulation Best Interest, which look at turnover and cost-to-equity to determine whether the trading was in your interest or the broker’s.
From abroad
Why distance does not matter here
These claims are built from trade data. Your statements and confirmations are the evidence, and the analysis is done in our office.