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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Dealing with transactions you did not approve

Investors rely on brokers to manage their funds ethically and accurately. If you have noticed a discrepancy in your statement, you may be concerned, especially if the activity you did not authorize has cost you money.

Hopefully, you keep a close eye on your investments, and you were able to spot this transaction as soon as your statement arrived. Dealing with the situation as quickly as possible may minimize your losses.

What should I do next?

The saying "time is money" is never truer than when dealing with investments. If your broker has taken liberties with your non-discretionary account, delaying corrective action may bring further negative consequences. Consumer advocates offer the following steps:

  • Contact your broker. Chances are good that the trade may have been an honest mistake. Although carelessness with account numbers and trades may be something you will want to monitor in the future, a mistake is not fraud.
  • Ask your broker to fix the trade. Including your broker's superior in this communication may ensure the problem gets immediate attention.
  • The broker should deal with the issue relatively quickly. If you don't hear from him or her within a few hours, financial advocates recommend a second communication. This time, you may wish to include the brokerage company's compliance officer and even the company president.
  • If your account remains uncorrected, you may be dealing with something more than an honest mistake. Consumer advocates suggest contacting authorities, for example, your state securities regulator or the Securities Exchange Commission.

As you go through each step, you will likely want to keep careful records of people with whom you communicate and what they say to you. This will help you keep track of the progress of your complaint, and it will provide you with accurate information to share with the authorities, should you need to involve them.

Where do I find support and guidance?

Whether you suffered a small setback or a substantial loss because of your broker's mishandling of your account, you have options for holding your broker accountable. This breach of fiduciary duty only cost you financially, but it may also have damaged your trust in the investment services you may be relying on for long-term security.

To restore your losses, time may be of the essence. If your efforts to resolve the issue with your broker have failed, you may wish to obtain legal counsel to assist you with the next step. A lawyer with a reputation for skilled representation against brokers who breach the trust of their investors will assist you in dealing with the broker and the proper authorities at the SEC.

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