suitability of client to trade options

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Is it illiegal for the broker to make option trades in a client account for which the client hasn't the money to cover the trade or to cover him/herself from exposure to a loss?

 

[ALawyer]

This sounds as if it is a clear case of unsuitability and possible margin violations, especially if the broker recommended the transactions. Of course if the client fraudulently induced the broker to make the trades by lying about his resources.... If the transactions were not authorized, then it's a clear violation, but the issue will be one of proof -- he said, she said....