How to Recover Money from Unauthorized Trades: Action Plan
January 13, 2026
Finding a trade in your account that you didn’t authorize is a heart-stopping moment. Whether it was a “glitch,” a hacked account, or a broker looking to pad their commissions (a practice known as “churning”), your money is at risk.
In the world of finance, silence is seen as consent. If you don’t act quickly, the brokerage firm may argue that you “ratified” the trade by not objecting. Here is your step-by-step battle plan to recover your funds.
1. Document Everything Immediately
Before you call anyone, create a “digital paper trail.” Large firms sometimes update their interfaces, and you don’t want the evidence of a suspicious trade to “disappear” or be modified during a correction.
- Take Screenshots: Capture the trade confirmation, the date, the amount, and your current balance.
- Check Your Logs: Look at your login history. Do you see IP addresses or locations you don’t recognize?
- Save Communications: If your broker mentioned this trade in a previous email or text, save those files immediately.
2. The "Notice of Dispute" (The 24-Hour Rule)
You must notify the firm in writing within 24 hours of discovering the trade. While a phone call is faster, a letter or email is legal evidence.
What to include in your message:
- Your account number.
- The specific trade details (Ticker symbol, quantity, price).
- A clear statement: “I did not authorize this transaction, and I demand it be reversed immediately.“
- Send this to the broker and the firm’s Compliance Department.
3. Understand Your Rights: FINRA Rule 2510
Under FINRA Rule 2510, a broker cannot exercise “discretionary power” (trading on your behalf) unless they have prior written authorization from you and the firm has accepted the account as discretionary.
If you didn’t sign a paper giving them “Discretionary Authority,” any trade they made without calling you first is a violation of federal rules. Knowing this terminology shows the firm you are an informed investor who cannot be intimidated.
4. Escalate Beyond the Firm
If the brokerage firm stalls, claims it was a “system error,” or refuses to refund the difference, it’s time to go public.
- File a Report on FinanceComplaintList.com: By listing the complaint publicly, you alert other investors and create a timestamped record of the firm’s misconduct.
- Contact Regulators: File a formal tip with the SEC or a complaint through the FINRA Central Registration Depository (CRD).
5. The Path to Recovery: Mediation and Arbitration
If the dollar amount is significant, you may need to enter FINRA Arbitration. This is a legal process where an impartial panel decides the case.
Most cases involving unauthorized trades are settled before they reach a final hearing because the “burden of proof” is on the broker to show they had your permission. A public complaint on a platform like ours often helps speed up this settlement process.
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