Churning: Excessive and Frequent Transactions to Generate Commissions are Improper
Brokers must manage clients’ assets with care and due diligence. They have the obligation to act with their clients’ financial well-being in mind, and never to prioritize themselves above the investors that trust them. In many fiduciary relationships between brokers and investors, compensation for the brokers’ work is structured to include commissions on each trade the brokers perform on the investors’ behalf. This common method of structuring compensation, however, provides an opportunity for abuse. When brokers engage in excessive trading for the purpose of generating commissions, this practice is called churning and is fraudulent.
Churning Claims Require Professional Legal Assistance
Deciphering whether your broker has engaged in excessive trading in your account can be a complicated process that involves significant legal experience to determine. If you think you may be a victim of churning, you should obtain legal assistance to determine your course of action. You may be eligible to recover your losses from excessive trading, and we are here to help. Contact us now for a free, confidential case evaluation and find out if you may have been a victim of your broker’s wrongdoing.Back to Practice Areas