Churning

Unethical stockbrokers sometimes increase their commissions by excessively trading their clients’ accounts. Also known as “overtrading”, “twisting”, and “churn and burn”, churning is against the NASD Fair Practice rules. Since a commission is usually paid each time a stockbroker executes a trade, commissions can erase any earnings your account might have and even turn them into a loss.

If your broker exercises control over the investment decisions in your account and engages in excessive trading in terms of the resources and type of account you have, you might have a case against your broker.

In order to prove that your investment account has been churned, a court will take a look at the turnover of the money in your account. If the entire assets in your account have been traded once a month, then you probably can prove that your stockbroker has churned your account and you should call us at (504) 526-2921 or e-mail us at: kirk@reasonoverllc.com.