Brokers make their earnings from commissions. The more trades they make
the more income they earn. Unfortunately, this sometimes leads to a form
of broker misconduct known as excessive trading.
Excessive trading, which is also referred to as churning or over-trading,
is not allowed and it often leads to financial loss.
This type of
broker fraud claim is almost always handled in mandatory arbitration before the Financial
Industry Regulatory Authority (FINRA). Turnover and control are key issues
that are reviewed to determine if excessive trading occurred. For example,
if your portfolio has a turnover of six times the average net worth of
your account, it could indicate that
churning took place. However, you also have to show that your broker controlled
and directed your account.
If you believe that you have lost money due to churning or some other
type of broker misconduct, you may be able to bring a claim against your
broker and/or the brokerage firm. For a free case evaluation by an experienced
broker fraud attorney, Our broker fraud lawyers are licensed in Ohio and California and we represent
investors nationwide in securities arbitration and litigation claims.