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<p>[QUOTE=&quot;352sdeer, post: 2953810, member: 91351&quot;]Yeah.....no&nbsp; a broker can churn an account every Six months by law. Do your research first so you know what you post</p><p><font size="6"><b>Churning (finance)</b></font></p><p><b>Churning</b> is the practice of executing trades for an <a href="https://en.m.wikipedia.org/wiki/Investment" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://en.m.wikipedia.org/wiki/Investment" rel="nofollow">investment</a> account by a salesman or <a href="https://en.m.wikipedia.org/wiki/Stockbroker" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://en.m.wikipedia.org/wiki/Stockbroker" rel="nofollow">broker</a> in order to generate <a href="https://en.m.wikipedia.org/wiki/Commission_(remuneration)" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://en.m.wikipedia.org/wiki/Commission_(remuneration)" rel="nofollow">commission</a> from the account. It is a breach of <a href="https://en.m.wikipedia.org/wiki/Securities_law" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://en.m.wikipedia.org/wiki/Securities_law" rel="nofollow">securities law</a> in many jurisdictions, and it is generally actionable by the account holder for the return of the commissions paid, and any losses occasioned by the broker&#039;s choice of stocks.</p><p><br /></p><p>Courts generally look at the turnover of an investment account, or the number of times the investment capital has been re-invested during a year. For example, for an actively traded mutual fund, the entire assets of the fund will be involved in buying and selling transactions once every six to twenty-four months. In churning cases, the entire assets of the investor are often traded once a month, or even more frequently. As a commission is paid on each trade, commissions can substantially destroy the value of an investment account in a very short period of time.</p><p><br /></p><p>Critics of the practice of paying brokers commissions for managing investment accounts point to churning as one of the indicators that the brokerage system indirectly encourages such behavior by brokers to the detriment of <a href="https://en.m.wikipedia.org/wiki/Investors" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://en.m.wikipedia.org/wiki/Investors" rel="nofollow">investors</a>. Accounts invested in securities with steady returns and little price fluctuation generate no commissions, and brokers are therefore not encouraged to invest their client&#039;s money in such investments.<a href="https://en.m.wikipedia.org/wiki/Churning_(finance)#cite_note-1" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://en.m.wikipedia.org/wiki/Churning_(finance)#cite_note-1" rel="nofollow">[1]</a></p><p><br /></p><p>Frequent trading in fee-based accounts is not an example of churning, since no commissions are generated in those transactions. However, the practice of putting clients who trade infrequently into a fee-based brokerage account is known as &quot;reverse churning&quot;, since clients are charged fees in accounts with few if any transactions[/QUOTE]</p><p><br /></p>

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