Is your Financial Advisor Churning your Account?
Have you suffered losses investing with your financial advisor? If so, The White Law Group may be able to help you by filing a FINRA arbitration claim against the brokerage firm that sold you the investments.
Like any profession – there are good financial advisors and there are bad ones. As long as financial advisors are compensated by commissions, some of the unscrupulous ones will continue to attempt to enrich themselves by excessively trading accounts.
Churning is excessive trading by a broker in a client’s account largely to generate commissions. Churning claims arise out of the inherent conflict of interest involved when a financial advisor is compensated by commissions earned in buying and selling securities on behalf of a client.
What’s the problem with churning?
Churning is illegal and unethical. It can violate SEC Rule 15c1-7 and other securities laws.
FINRA also has rules that include interpretative material on churning, or what FINRA calls “quantitative suitability.”
Proving a Churning Claim
In order to prove a Churning Claim you need to be able to prove the following:
- Did the client give the broker control of the account?
- Is the broker excessively trading the account?
- Is the broker excessively trading the account in order to gain commissions?
Churning claims can be complex and sometimes difficult to prove. Brokerage firm almost always hire experience securities defense firms to defend them in these claims. If you believe that you are the victim of churning by your brokerage firm or financial advisor, it is recommended that you consult with an experienced securities attorney. For a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, visit http://www.whitesecuritieslaw.com.