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Securities Law Definitions


Churning is trading in a customer's account that is excessive in light of his investment objectives, for purposes of generating commissions, without regard to the interests of the customer. In a churning case, the customer must prove: 1) that the broker controlled the account; 2) that the trading was excessive in light of investment objectives; and 3) that the broker intended to defraud the customer or acted willfully or recklessly.

For more information, see Churned or Traded and Typical Customer Disputes at the Securities Law Home Page.

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