Last Updated: January 2024
SEC Investor Alert: Excessive Trading at Investor’s Expense
Here’s what the SEC has to say about the topic of Churning in SEC Investor Alerts and Bulletin published in 1997, recently updated in February 2023.
In case you don’t choose to read it all yourself, here are the highlights.
Churning: When a broker trades excessively (buying and selling), thinking first of his commissions and then lastly, whether or not it is the best thing for your account.
Redflag Warnings you should look for:
- Look for Unauthorized Trading
- Look for Frequent Trading
- Look for Excessive Fees
Investment Objectives
The SEC suggests you make sure you discuss your goals with your broker, and that you agree with (and understand) the stated goals from the outset. Common terms for describing investment goals used in the industry are:
- Capital Preservation
- Income
- Growth
- Moderately aggressive
- Aggressive Growth
- Speculation
The SEC reminds investors that excessive trading (Churning) can occur even if the overall account value increases.
Follow this link to view more information on actual customer disputes involving CHURNING.
What Should you do if you think your account has been excessively traded?
If you believe your account has been churned or if you have suffered unexplained investment losses, contact us for a complimentary consultation with an experienced securities lawyer to learn how you may be able to recover damages through FINRA arbitration.
With offices in Boca Raton, FL and Austin, TX, stockbroker fraud attorney Bob Rex provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers, financial advisors and broker dealers.
If you have questions about how your account has been handled, call (877) 224-3199 to speak with an experienced securities attorney at no cost to you.
Most cases are handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
