0

Person A establish a brokerage account with an online brokerage XYZ. He then gives person B authority to trade the account. The XYZ brokerage account gives person A and person B to different user names. Each user name access the account. Person B then uses person's A account to trade the account.

Did person B break the law? I was told by a broker that he did. It seems to me he did not.

1

1 Answer 1

1

The usual provisos about jurisdictional differences may apply, and the last sentence of the first paragraph currently uses "account" to relate to two different things - I'll assume that sentence means "Person B then uses person A's user information to trade the account".

It's clear that XYZ expected the two users of the account to use different user identifications - they issued two. An accusation of misrepresentation is most likely to come from the brokerage firm, though it could also come from an internal or external auditor or from A if A assumed that B knew that they were expected to use their own user identification.

There may be mitigation - if A said to B "Here's authority to use the account : these are my login details", and/or if XYZ did not effectively communicate the separate user details to B, a Reasonable Person could conclude that B had not knowingly misrepresented themselves as A.

As the question stands it looks like an accusation of misrepresentation against B would be both possible and reasonable.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .