General
churning
What does churning mean?
Excessive trading in a customer's account by a broker whose real motivation is the commission on every ticket, not the client's investment goals. Illegal under SEC and FINRA rules. The tell is high turnover with no coherent strategy, the account bleeding fees while the broker pads his number.
"She sued her broker for churning, 200 trades in a year on a retirement account."
Frequently asked questions
What does churning mean in finance?
Churning is when a broker over-trades a client's account purely to harvest commissions.
Is churning illegal?
Yes — trading a client's account excessively just to generate commissions is a prohibited practice in the securities industry.
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