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Simply put, churning is the excessive buying and selling of investments by a broker for the sole purpose of making the broker more money through commissions.
If churning occurs, our attorneys can bring several types of claims on behalf of the wronged investor. One typical claim we bring is for failure to supervise. Brokerage firms have compliance systems that are used to detect broker sales practice violations. If the software detects something wrong, or generates a “red flag,” it typically generates a report for supervisory review. Supervisors should question their brokers about the conduct and unwind any wrongful transactions. Supervisors who fail to speak with their brokers about churning misconduct may also be liable.
Other claims include a breach of the duty to recommend suitable investments and violations of federal and state securities laws.
Most clients need the help of an experienced financial securities fraud attorney to determine that churning has occurred. Investors who have suffered losses that cannot be explained by market downturns or theft should consult our team. We review the monthly accounting documents and look for large volumes of trades that are happening without a legitimate explanation
The plaintiff must prove the following three factors to make a successful claim:
Proving that churning has occurred can be complicated. And often requires the assistance of a knowledgeable attorney. The lawyers at The Frankowski Firm can help.
Brokers and brokerage firms have no right to buy and sell securities just to generate excessive commissions. The attorneys at The Frankowski Firm have a strong record of holding unethical brokers liable for their wrongful actions. We have the professional experience to know when churning has occurred, how to prove churning in arbitration or court, and how to quantify the damages. Call our trusted attorneys at 888-741-7503 or make an appointment through our contact form..
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