If you gave your broker “trading discretionary authority” then he or she has limited power of attorney to place buys and sells in your account without obtaining permission prior to making the trade.  Also, if you gave your broker permission to sell or buy a certain stock when the broker felt it was right, this is often called having “time and price discretion.”  Each situation bestows the broker with a fiduciary duty to handle the account as a prudent investor would.

If your broker was given this kind of discretion in your account it is important to ensure that the broker is making trades in accordance with your investment objectives and risk tolerance.  Some brokers are tempted to use this situation to generate commissions for themselves without any regard to the needs of the investor.  This is also known as “churning” and hence a violation of industry regulations.  It is also a breach of the broker’s duty to buy and sell risky stocks or to “time the stock market” if, for example, the investor wanted low risk or was a conservative investor.

If you gave your broker discretionary trading authority and he or she abused that authority which resulted in realized or unrealized losses then you may be eligible to a recovery of your losses.  Call the Securities Law Firm of Menzer & Hill, P.A. for a free consultation.