Investor Glossary-churningInvestor Glossary-churningInvestor Glossary-churningInvestor Glossary-churningInsightful stock market charts - Click here
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z


The HTML to link to this page

Churning means excessive buying and selling in a client's account by a broker for the primary purpose of generating commissions rather than furthering the customer's investment goals. The major securities industry self-regulatory organizations (SROs) have rules that prohibit churning. Churning violates the NASD Fair Practice Rules. While churning is illegal, it is often difficult to prove. An attorney can analyze a broker's records to determine if churning has occurred. To establish that churning has taken place, the attorney must show that the pattern of trading activity in the account was excessive in size or frequency, given the financial resources and character of a customer's account. Most churning occurs when a broker has discretion to trade the account. Most churning involves trades of individual securities, but the SEC also discourages trading of mutual funds on a short-term basis.

Rate this churning definition...

Learn about investing with the Investor Glossary Term of the Day

Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.

Popular Terms: required rate of return, ex-dividend date, Key Rate Duration, FICO score, VIX, deferred revenue, class C shares, in escrow, wholly-owned subsidiary, reverse mortgage, minority interest, option premium, risk management, LIBOR, irrevocable trust, average price per share, 144a, implied volatility, margin rate, annual return, current ratio, dividends payable, Zero Cost Collar, real GDP, limit order, EBITDA, open position, stock market close, cancelled check, retained earnings, debt service coverage, deferred tax, phantom income, command economy, APR, ex-dividend, FTSE, per diem, 1031 exchange, labor relations, inflation, stock split, covered put, 401a, diluted share, liquidity ratio, balance sheet, 1035 exchange, quality assurance

Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use