Excessive trading, also known as churning, is a deceptive practice where a financial adviser makes excessive trades on an investor’s account to generate commissions. This unethical behavior can lead to significant financial losses for the investor.
At Meyer Wilson, our excessive trading/churning lawyers serving Florida are dedicated to helping investors who have been victims of advisor misconduct. With 75 years of combined experience and more than a 98% success rate, our Florida investment fraud lawyers have what it takes to win these cases.
If you believe you have been a victim of churning in Florida, it is crucial to consult with a qualified attorney. Find out whether you have a case during a free consultation.
Understanding Investment Churning
Churning occurs when a financial advisor excessively trades securities within a client’s account, primarily to generate commissions. This practice contradicts the fundamental duty of financial professionals to prioritize their clients’ best interests.
Churning stocks or other investments is not only unethical but also violates investor protection laws outlined by the U.S. Securities and Exchange Commission (SEC). Additionally, the Financial Industry Regulatory Authority (FINRA) has instituted measures to curb excessive trading by advisors.
Our legal team regularly handles cases involving investment churning and skillfully navigates FINRA arbitration and other resolution avenues. Contact us for a complimentary consultation to discuss your available options.
How Financial Advisors Hide Investment Churning
To conceal churning, unscrupulous advisors and their firms often categorize brokerage accounts’ investment objectives as “speculation” with a “high” or “aggressive” risk tolerance, presenting excessive trading as legitimate.
Despite frequent trades, advisors justify their actions by claiming clients accepted risks and actively sought such trading. However, brokerage firms must ensure trading strategies serve each client’s best interests while also complying with securities industry regulations.
Even if accounts are labeled speculative, and clients have aggressive risk tolerances, excessive trading goes against investors’ interests. No investor consents to having their account manipulated solely for the advisor’s benefit, irrespective of their risk tolerance.
Detecting Churning in Your Investment Account
Unscrupulous advisors conceal churning by using strategies like holding onto underperforming assets while selling profitable ones. This creates the illusion of portfolio growth while hiding the adverse impact of frequent commissions and subpar investments.
Curious if your financial advisor is guilty of churning investments? Check your account statements for the following warning signs:
- Excessive trading
- Poor communication
- High turnover rate
- Unexpected fees and commissions
- Unsuitable investments
- Lack of diversification
- Poor performance
If you notice any of these red flags, you need a knowledgeable attorney who is well-versed in advisor misconduct laws. Our team of excessive trading/churning attorneys serving Florida is available for a free consultation to assess your situation.
Choosing the Right F Excessive Trading and Churning Attorney Serving Florida
When facing financial losses resulting from stock or investment churning, choosing the right law firm is vital to the success of your case.
Here’s why Meyer Wilson is the optimal choice:
- Proven track record: With over 75 years of combined experience, our team has consistently and successfully recovered financial losses stemming from advisor misconduct.
- High success rate: As we mentioned, our lawyers prevail in over 98% of the cases they handle, so you can feel confident that you are doing everything you can to achieve a favorable outcome.
- Ample resources: We have extensive resources because we forge strong relationships with mediators, securities regulators, and expert witnesses to combat stock/investment churning effectively.
Trust our firm’s expertise, dedication, and demonstrated case results when seeking legal representation for financial misconduct. We are committed to protecting your rights, navigating intricate legal proceedings, and pursuing the financial recovery you deserve.
How Investment Churning Claims Are Resolved Through Arbitration
Investment churning claims are typically addressed via FINRA arbitration, where impartial arbitrators assess evidence and issue binding rulings.
- Turnover: Arbitrators determine whether there is a disproportionate ratio of opening buy transactions to portfolio net worth or equity, indicating potential churning.
- Control: They also determine who managed the trading activity, which strengthens the claim because it showcases the advisor’s influence.
- Commissions and fees: Disproportionately high transaction costs relative to benefits bolster the case for churning.
- Documentation: Comprehensive and accurate records, such as account statements and communication logs, can serve as vital evidence.
- Breach of fiduciary duty: Determining whether the advisor had a fiduciary duty and violated it can also strengthen the claim against them.
FINRA arbitration is preferred for its efficiency and cost-effectiveness compared to court litigation, expediting resolution.
If you’ve been a victim of stock churning or excessive trading, our experienced churning lawyers serving Florida may be able to help you seek damages.
Talk to an Excessive Trading / Churning Attorney Serving Florida
Don’t let your financial advisor get away with taking advantage of you! We realize these situations can be awkward, but Meyer Wilson is here to support you. With a long history of securing financial restitution for clients nationwide, our legal team has the experience and resources needed to help you recoup your investment losses.
Our approach involves conducting thorough case assessments and meticulously examining your account activity to pinpoint advisor misconduct. Should we uncover evidence of negligence or fraud, we will aggressively advocate for your financial recovery.
Contact us today to get started in a free consultation with our Florida excessive trading/churning lawyers.