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Unauthorized Transactions

Feb. 14, 2012

Unauthorized transactions are trades that a broker makes for a customer without the customer’s permission or authorization.

The major securities industry self-regulatory organizations have rules prohibiting unauthorized transactions. FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade) prohibits brokers from making unauthorized transactions in their customers’ accounts.

There are certain exceptions.  For instance, if a customer has a margin account and the value of the account falls below the brokerage firm's requirements, the broker may be able to sell the customer’s securities without consulting the customer beforehand.  For more information, please read “Margin Position Sellouts”.

If you believe a broker made unauthorized transactions or engaged in another sales practice abuse, please send us your complaint using our online complaint form.




The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions conce
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