500 Instead of 50: The Keying Error and the Cancel-and-Rebill Request

The recording controls: 50 shares were authorized, 500 were entered. The excess 450 shares are unauthorized and the client is not bound by them.

Sequence:

1. Notify your principal the same day. Do not wait, do not handle it quietly, and do not try to net it out.
2. Document in writing: the recorded call, the order ticket, the assistant's keying, the fill, the confirmation, and the timeline.
3. Correct the trade. The 450 excess shares come out of Alma's account at her authorized price of $30.10 and go to the firm's error account. The firm absorbs the market movement on those shares - at $28.40 that is a loss of roughly $765 (450 × $1.70) plus commissions. That loss belongs to the firm, not to Alma.
4. Make Alma whole. She should end up holding exactly 50 shares at $30.10, or, if she prefers, no shares at all.

What not to do:

• Do not let the shares sit in her account and "work it out" later.
• Do not move the shares to another client or to Ken's personal account.
• Do not tell her the confirmation stands because she did not object within some window - an unauthorized trade is not cured by silence.

Then fix the process: was there a written order ticket, was the order read back, and why was a $150,000 order keyed by an assistant without confirmation?

You cannot, and the request itself is the problem.

"Cancel and rebill" is prohibited. Once a trade has been executed and confirmed, you cannot cancel it to give the client a better price, nor can you backdate an order to a more favorable day. Doing so:

• Misstates the trade date and price on the firm's books and on the confirmation,
• Harms the contra party who traded at $30.10 in good faith, and
• Constitutes fraudulent recordkeeping - a serious regulatory and disciplinary matter, not a customer-service accommodation.

The 50 shares she did authorize were validly executed at $30.10. She owns them. The market risk from that point is hers, both up and down. The 450 shares are the firm's problem, not a bargaining chip.

What she can actually do:

• Sell the 50 shares now at the market. That is a legitimate new trade that realizes a real loss (~$85 at $28.40), and it is her decision to make.
• Hold them and accept the market risk.

The offer to "not complain to your manager" in exchange for a backdated trade is itself a red flag. Decline it, document it, and make sure your principal sees the full exchange - including the offer. A rep who accepts that deal has converted a fixable operational error into an enforcement matter.

Treat the extra 450 as a new, separate purchase that requires her authorization and a fresh suitability review.

Authorization:

• Get the order on a recorded line or in writing. "I want all 500" is a decision about 500 shares - confirm that she understands 450 of them were never ordered.
• Confirm the price she is actually paying, which will be the current market (~$28.40), not $30.10. Do not let her believe she is getting the original fill.

Suitability and settlement:

• 500 shares at ~$28.40 is roughly $14,200 - about 7% of a $210,000 cash account. Check it against her stated objectives and any concentration limits, and confirm the cash is there to settle.
• She must pay by settlement date. In a cash account, the funds must be available; do not let the position ride on unsettled money.

Documentation:

• Update the file with the error, the firm's correction of the 450 excess shares (or her election to buy them at market), the prices, and the dates.
• Note the supervisory review of the assistant's order entry and whether order read-back procedures need to change.

The clean outcome: 50 shares at $30.10 (authorized) + 450 shares bought at market on her instruction (new trade). Two trades, two prices, both accurately recorded.