churning

churning definition - legal

v

In securities law, the excessive and inappropriate trading of securities in a customerÂ’s stock investment account for the purpose of earning the stockbroker more commissions than what would have been earned if the stockbroker was concerned only with the furtherance of his customerÂ’s interests. This practice is illegal under the Securities Exchange Act of 1934; however, there is usually no right of action for churning.

Webster's New World Law Dictionary Copyright © 2006 by Wiley Publishing, Inc., Hoboken, New Jersey.
Used by arrangement with John Wiley & Sons, Inc.

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