Finding trades in your brokerage account that you never approved can feel disorienting fast. Many investors first notice the problem when a confirmation email appears out of nowhere, a monthly statement shows unfamiliar positions, or losses start piling up without a clear explanation.
In general terms, proving unauthorized trading is not just about showing that a trade happened. It often involves showing what authority the broker did or did not have, what you actually approved, what the firm’s records say, and how quickly you objected once you discovered the problem. If you are still getting oriented, it may help to start with this broader overview of unapproved trades, account control, and damages, then come back to the evidence issues covered here.
In this post you’ll learn how unauthorized trading claims are commonly evaluated, what documents often matter most, what can make proof easier or harder, and how an attorney may help organize the evidence for a FINRA arbitration claim.
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At a basic level, unauthorized trading usually means a broker bought or sold securities in your account without first obtaining your permission for that specific trade, unless the broker had valid written discretionary authority or only exercised narrow time-and-price discretion allowed under industry rules. FINRA tells investors that buying or selling in a customer account without first contacting the customer and receiving authorization is prohibited unless the broker has written discretionary authority or was given discretion as to price and time. FINRA
That distinction matters. Not every trade you dislike is unauthorized. A losing investment can still be authorized. On the other hand, a profitable trade can still be unauthorized if you never approved it.
FINRA Rule 3260 states that a broker generally may not exercise discretionary power in a customer account unless the customer gave prior written authorization to a stated individual and the account was accepted in writing by the firm. FINRA Rule 3260 FINRA also recognizes a limited exception for discretion as to price or time on an order for a definite amount of a specified security, and even that authority is typically limited to the end of the same business day absent a specific written indication otherwise. FINRA Rule 3260
So when lawyers and arbitrators evaluate these cases, one of the first questions is often simple: Did the broker have actual authority for these trades?
The first practical step is narrowing the dispute down to specific transactions. Broad statements like “my broker traded too much” can overlap with churning, suitability, or supervision claims. Unauthorized trading claims often become stronger when they identify:
The SEC’s investor guidance explains that trade confirmations serve an investor-protection function by allowing investors to verify the terms of transactions and spot fraud or errors. It also notes that investors can compare confirmations with periodic statements for discrepancies. Investor.gov