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NYSE Rule 408(a) and FINRA Rules 2510(b) and 2020 explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading violates just and equitable principles of trade and constitutes violations of Rule 10b and 10b-5 due to its fraudulent nature.
There are certain exceptions. For instance, if a customer has a margin account and the value of the account falls below the brokerage firm’s requirements, the broker may be able to sell the customer’s securities without consulting the customer beforehand.