What You Need to Know About Excessive Trading Activity Claims
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.