Churning by Brokers
Experience in Churning Cases
Lawyer Diane A. Nygaard has successfully represented people who have been victims of “churning” by their broker.
What is Churning?
“Churning” is excessive stock or bond trading recommended or done by a broker. Most securities should be bought and held. Bonds, in particular, are bought and held for the income that they pay. Usually they are held until the bond matures.
Churning increases the brokerage firm’s fees because fees are charged for each purchase and sale of a security. The more trades, the more money the broker and the firm make.
The securities laws provide that someone whose account has been “churned” can recover the amount of commissions, attorneys’ fees and costs, as well as the difference between the portfolio’s value and the value it would have had if it had been well managed.