Allegations of unauthorized trading claims present significant risks for investment brokers and brokerage firms. In addition to investor arbitration with the Financial Industry Regulatory Authority (FINRA), brokers and brokerage firms can also face U.S. Securities and Exchange Commission (SEC) investigations and enforcement actions. While these enforcement actions carry the potential for administrative and civil penalties in most cases, the SEC also refers brokers and brokerage firms to the U.S. Department of Justice (DOJ) for criminal prosecution when warranted.
