Unauthorized Trading Lawsuits
As a condition of maintaining a Series 7 license, brokers must have "discretion" (written authority from
the client) or a power of attorney to trade accounts. Without proper authorization, accounts are considered
"non-discretionary" which requires each client approve each trade before an order is placed. Established
violations of trading authority rules include: 1) ignoring client instructions, 2) untimely trades, 3)
preventing trades, 4) high pressure transaction schemes, and 5) trades made in violation of a conflict of
interest. The success of unauthorized trading lawsuits depends upon proof of a violation of S.E.C. rules, or
state securities, fraud, fiduciary, contract, or personal injury laws.
Unauthorized Trading Lawsuits - Personal Injury Law :
When evaluating any unauthorized trading claim, state personal injury law frequently governs when a cause action may be
pursued, the extent of civil responsibility, what recoveries are permitted, and how a cases
are presented at trial. Less often, federal statutes may preempt state laws and require lawsuits to be
filed the federal district court or one of a wide assortment of federal administrative law proceedings,
or occasionally allows plaintiffs to opt for either federal or state court systems. In all unauthorized
trading lawsuits,
settlement of civil liability claims before trial is strongly encouraged by judges to promote judicial economy.
For plaintiffs, settlement of lawsuits is permissive, and may be more advantageous than trial.
Settling lawsuits reduces risk, guarantees the recovery amount, should be contingent upon collection, and saves
time, attorney fees, and litigation costs. The greatest advantage of trial is economic - plaintiffs may
receive substantially larger awards in unauthorized trading lawsuits from court or jury verdicts than settlement offers.
Application of Law:
The evaluation of facts and applicable personal injury laws is a dynamic process, based upon circumstances
that are personal to each case. Statutes, cases, and rules of evidence and procedure all impact the ultimate
success or failure of each case. Lawyers who specialize in unauthorized trading lawsuits for plaintiffs interpret laws in
the light most favorable to their client when establishing liability, injuries, compensability, and settlement terms.
Similarly, defense lawyers and insurance adjusters are professionals who are equally talented in influencing
settlement of unauthorized trading claims far below the true trial value when claimants represents themselves.
See also: Unauthorized Trading Lawsuits - How to Find a Lawyer, Laws, & Lawyer Searches.
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