What is Account Churning?
“Account Churning” happens when a stockbroker, brokerage firm, or investment advisor partakes in excessive trading with one account. By excessively trading, the broker attempts to illegitimately gain commissions from the client. When a broker churns an account, he/she will most likely sell any investments that are gaining to show a sign of profit, and then hold onto accounts that may not be generating revenue. All of this excessive trading or account activity can lead a client to believe that he/she owes the broker money or commissions, even though that might not actually be the case.
Brokers who partake in account churning violate the best practices that are outlined by the Securities and Exchange Commission (SEC). They also violate the trust of their clients and can cause their clients to experience significant investment and stock losses. When a client’s account is incorrectly handled and compromised, the broker must be held liable for the damage he/she has caused.
If your stock broker is charging you excessive commissions, and you have reason to suspect that your account has been churned, it is in your best interest to retain the services of a skilled securities attorney immediately. Account churning should never be tolerated nor should your financial security be compromised by a dishonest broker.
You have the right to take legal action against your broker if he/she churned your account. In some cases, you may be able to file a lawsuit to recover damages from your broker for his/her negligence. By working with a securities lawyer, you can learn more about your legal options and protect your financial well-being.
Los Angeles Securities Attorney
The Law Offices of Jonathan W. Evans & Associates is a California based law office assisting clients nationally and worldwide with securities matters. If you have questions regarding possible account churning, Attorney Jonathan W. Evans can help you. Attorney Evans has significant securities litigation experience and is extremely knowledgeable in this complex area of law. By working with Los Angeles securities lawyer, Jonathan W. Evans, clients can contest their illegitimate losses and ensure that their finances remain secure.
Call The Law Offices of Jonathan W. Evans & Associates today at (800) 699-1881!