Churning

Recovering Investment Losses Caused by Churning

When a stockbroker buys or sells securities for the primary purpose of getting a commission — rather than because the trade makes financial sense for the investor, this is called “churning,” and it is illegal. Excessive trading violates the fundamental principle that the client's interests should always come first. Commissions associated with excessive trading can make it nearly impossible for an investment portfolio to become profitable.

If you suspect that frequent sales of profitable or “winning” stocks has disguised overall poor performance in your portfolio, or that your stockbroker has engaged in churning, get legal advice from a knowledgeable securities law attorney. Contact a lawyer at Dimond Kaplan & Rothstein, P.A. (DKR).

We represent investors in stock fraud and stockbroker misconduct claims in securities arbitration and securities litigation. We represent investors in South Florida and throughout the United States and Latin America.

DKR has obtained significant financial recoveries against stockbrokers and brokerage firms who took advantage of clients by engaging in churning and other kinds of securities fraud.

Identifying excessive trading and the inappropriate loss of investor assets

Our securities attorneys know how to spot churning and the excessive trading and sale of stocks, bonds, mutual funds and annuities. We also know how to prove it before a FINRA arbitration panel.

Our lawyers have direct experience working in the securities industry. In a churning case, we can analyze broker trading in your account to identify whether trades were made for your benefit or primarily to generate income for the broker and brokerage firm.

In the case of excessive trading, a broker often sells profitable investments quickly while holding on to losing investments. The frequent gains realized when profitable investments are sold creates the illusion that a portfolio is performing well when in truth it is becoming increasingly bogged down by stocks and bonds that are losing money, and further depleted by the commissions you are paying.

In order to prove a churning case, we gather evidence of how the brokerage firm supervised your broker and how your actual account performance fell short of what would have been achieved through proper management of your investments.

Advocating for recovery of investment losses from excessive trading

If you have been victimized by a deceptive stockbroker or brokerage firm, speak with an experienced securities arbitration attorney at DKR. Call 888.578.6255 or e-mail us to schedule a free consultation. We represent investors in Fort Lauderdale, throughout South Florida, and throughout the nation. Take the first step toward recovering your investment losses.