Churning and Excessive Trading
Churning or excessive trading occurs when a broker engages in frequent trading of stocks to increase the broker's commissions to the detriment of the customer. The commissions often can be so high that your investment account may never turn a profit. Further, the customer often does not know about the excessive trading or is told by the broker that he wanted to "get out" after a small profit in the stock.
To evaluate whether churning or excessive trading has occurred in your account, McCabe Rabin uses financial experts to crunch the numbers and evaluate the turnover ratios for each of your stocks. The higher ratio per stock and across a variety of stocks, the more likely it is that abuse has occurred in your account.
Supervisors at brokerage firms have an obligation to look out for a broker's frequent trading, but many do not because of the number of accounts they are responsible for monitoring or the commissions are generating such a good profit for the firm.
If you believe that you are victim of churning or excessive trading and you want a free consultation, please contact the stockbroker misconduct attorneys of McCabe Rabin online or call 561-659-7878 or Toll Free 877-915-4040.