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  • Colleen MacFarlane

Sanctions for Churning

The SEC defines churning as excessive buying and selling in a customer’s account that the broker controls in order to generate increased commissions. Brokers who over trade may be in breach of SEC Rule 15c1-7, which governs manipulative and deceptive conduct.

The Securities and Exchange Commission (SEC) looks into complaints about brokers who appear to be putting their own interests over that of their clients.

The Financial Industry Regulatory Authority (FINRA) governs over trading under rule 2111 and the New York Stock Exchange (NYSE) prohibits the practice under Rule 408(c) and investors who believe they have been a victim of churning can file a complaint with either the SEC or FINRA.





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