We watched this pattern unfold on Wall Street more times than I care to remember. A broker builds trust with an elderly client. The client signs a power of attorney or a limited discretion agreement. Trading quietly accelerates. By the time the family discovers the damage, the account has bled six figures in commissions and losses.
How unauthorized trading targets the vulnerable
Unauthorized trading occurs when a broker executes transactions without a client’s explicit permission for each trade. Even with a limited discretion agreement, brokers must still act within the agreed parameters and act in the client’s best interest. Many elderly investors do not realize they can challenge these trades until months have passed.
FINRA reported a 23% increase in unauthorized trading complaints involving clients over age 70 in the past two years. The median loss in these cases exceeded $185,000. Brokers frequently justify the activity as routine portfolio rebalancing, which makes detection difficult for family members reviewing statements.
Why elder financial abuse goes unreported
Shame and confusion prevent many victims from speaking up. An older investor may not recognize excessive trading when statements arrive monthly. Some fear appearing incompetent if they question a broker they have trusted for years. Others simply lack the family support to review their accounts regularly.
Firms have a legal duty to supervise accounts held by seniors and to escalate red flags. When firms ignore suspicious patterns or fail to review reports, they compound the harm and expose themselves to liability.
Signs your account may have been compromised
Unexplained commission spikes represent one clear warning. If trading volume suddenly doubles or triples, ask questions. Frequent in-and-out transactions in conservative accounts also signal possible churning. Any trade executed without your prior knowledge, even during volatile markets, is a red flag.
Haselkorn & Thibaut fights for investor recovery
We built our practice because we saw what happens when Wall Street regulators fall short. Haselkorn & Thibaut is a national securities law firm made up of former Wall Street defense attorneys who now represent investors. We have recovered more than $520 million in verdicts and settlements. Our success rate on recoverable cases sits at 98%. Our attorneys have earned an AV Preeminent rating from Martindale-Hubbell and carry more than 95 years of combined experience.
We do not charge any fee unless we recover money for the investor. Every case gets reviewed directly by a partner who spent years on the other side of the table.
Contact Haselkorn & Thibaut today
If you or a family member suffered losses from unauthorized trading or broker misconduct, we can help. Call us now at 1-888-885-7162 or visit htattorneys.com for a free case evaluation.
Disclaimer: The information on this page is for general informational purposes only and does not constitute legal or financial advice. Reading this article does not create an attorney-client relationship. Past results do not guarantee future outcomes. Consult a licensed securities attorney for advice specific to your situation.
