Lawyers Representing Victims of Churning

As an investor, you are aware that putting your money into securities is not without its risks.  However, if you are concerned over losing large amounts of money or paying excessive commissions or  transaction fees, you may be the victim of financial fraud.  Our lawyers at Block & Landsman have seen how different types of wrongdoing have all led to the same result: an investor suffering a financial loss.

Excessive Commissions And Churning

Churning is a form of fraud through which accounts that hold traditional securities including exchange traded funds (“ETFs”) are subject to excessive transactions.  For most brokerage accounts, the broker or financial advisor make commissions or fees off of every transaction they make.   Some brokers try to increase their commission by entering an excessive amount of transactions in their clients’ accounts. Churning may be identified through the following factors:

  • The account’s frequent buying and selling is uncharacteristic
  • The transactions are doing little to meet the investor’s objectives
  • There are substantial losses on the account
  • Unauthorized trades
  • Repeated buying and selling of the same security

It is important to understand that churning only occurs on accounts through which brokers, financial advisors or other financial professionals have actual or implied discretionary authority. For example, if you give your financial advisor power over your assets, that advisor can then make transactions on your behalf without having to report them to anyone. While this behavior constitutes a breach of fiduciary duty some financial professionals cannot resist the opportunity handed to them.

Legal Help When You Need It

If you feel that something is not quite right with your account, we will conduct a confidential review and investigation to determine the nature of the trading activity, who is making these trades and whether the trades are excessive. Then, if justified, we will pursue justice on your behalf and whether we go to arbitration or trial, we will tenaciously work toward recovering compensation for your losses.

In addition to securities and commodities litigation, our lawyers at Block & Landsman handle cases that involve industry disputes, restrictive covenants, noncompete agreements and employment agreements, and business litigation. We welcome your questions and the opportunity to learn more about your circumstances and how we may be able to help. To schedule a confidential consultation to discuss your concerns, please contact us at 312-251-1144.