And say you don't realize what's happened until your portfolio has been ravaged and you're headed to arbitration -- your only choice because brokers make you give up your right to court before they'll do business with you.
Would it surprise you to learn that it was as much your responsibility to be on watch for rogue trades by your broker as it was your brokerage firm's? That's an argument Wall Street likes to make when it comes up against investors who file complaints saying they've been ripped off.
The so-called "shared responsibility" of investors to monitor their accounts was the subject of much discussion here late last month at the annual meeting of the Public Investors Arbitration Bar Association, or Piaba, a group of lawyers who represent investors.
Of course, there are plenty of cases where disgruntled investors blame their broker just because their account balance dropped in a market collapse.
Investing carries risks, and there is a fine line between the client's willingness to take risks and the broker's responsibility to inform and limit those risks. Even so, some brokers do trade recklessly or recommend high-fee, risky products just to rack up commissions--and the client often doesn't realize it until it's too late.
A popular brokerage firm defense is that clients have "ratified" what's happening in their accounts if they don't contest the statements right away. Firms also tell aggrieved customers that oral assurances by a salesman mean noting when there's a prospectus that tells the real story.
To illustrate Wall Street's "We're in this together" approach, New Orleans lawyer Joseph Peiffer shared a transcript of a May 27 proceeding before arbitrators at Finra, the self-regulatory organization that decides most disputes between investors and brokers.
Peiffer: When comparing Morgan Stanley's duties to detect unauthorized trades to customers' duties to detect unauthorized trades, who has the higher duty, the customer or Morgan Stanley?
Rosen: I think both of them have equal. Morgan Stanley has the duty to try and detect if that's going on. The customer has a duty to protect their own assets and to make sure that the trust and confidence that they have given to the brokerage firm is being followed. You can't, you can't just turn a blind eye to everything.