Churning is a common type of broker misconduct that can affect investors in Michigan. Churning generates commissions for the stockbroker without benefiting the investor; in fact, many investors lose significant money due to churning. If you or someone in your family suffered serious economic losses due to churning, or excessive trading in an account, please contact an attorney at Meyer Wilson. Our award-winning law firm exclusively handles investor claims and class/mass actions. We may be able to secure financial compensation for your losses due to Michigan churning fraud.
Churning is an industry term for excessive trading. It occurs when a securities broker trades on a client’s account to generate commissions, not to benefit the client with suitable trades. Churning violates the U.S. Securities and Exchange Commission (SEC) Rule 15c1-7. It is an illegal type of broker misconduct that could lead to significant losses for the investor. You might be able to tell a broker is churning your investment account by watching for a few red flags.
Any suspicious activity on your account or by your stockbroker could be a red flag for excessive trading or another form of misconduct. If you recognize the signs of churning, speak to an attorney at Meyer Wilson right away. Immediate action could prevent further economic losses. Our attorneys can help you take a stand against a fraudulent financial advisor, stockbroker or firm in Michigan.
During a civil claim against a broker for churning, the burden of proof will rest with your side of the case – the plaintiff’s side. Hiring an attorney from Meyer Wilson could help you with the burden of proof. We know how to collect evidence, hire expert witnesses and take other steps to prove the necessary elements for a claim.
A lawyer from Meyer Wilson could help you prove your case through determining factors such as turnover ratio. This is the total amount of purchases your broker made in your account, divided by the account’s average monthly equity. Annualizing this ratio will give a number of trades that is reasonable for the specific investor. An excessive amount over this number could be evidence of churning.
If you suspect churning is what recently caused the financial losses in your account, please do not hesitate to contact us. The Michigan lawyers at Meyer Wilson may be able to help you file a claim for damages.