Excessive Trading


Recover Your Losses From Excessive Trading in FINRA Arbitration With Our Attorneys

While brokers and investment advisors need to make trades to make their clients money, there comes a point at which too much portfolio activity can have detrimental effects for individual investors. Typically, however, these detrimental effects often mean profits for the broker or advisor. Excessive trading (also known as “account churning”) can result in huge commissions and fees. Unfortunately, for this reason, it is a common practice amongst unscrupulous investment professionals.

3 Warning Signs of Excessive Trading

If you are concerned that your broker or investment advisor may be profiting at your expense, there are a number of warning signs you can look for. As outlined by the Securities and Exchange Commission (SEC), three of the most common warning signs of excessive trading are:

  • Trades that you did not authorize suddenly appearing in your monthly account statement
  • Frequent trading (or “in-and-out” purchases and sales of securities) in a manner that is inconsistent with your investor profile
  • Excessive fees across your entire account or within a particular segment of your portfolio

The SEC also warns, “[b]e aware that excessive trading can occur even if the overall account value increases.  Also, remember that your account statements, trade confirmations, and online account do not disclose all fees.” In other words, even if you are making money overall or if excessive fees are not showing up in your account, you could still be losing out due to excessive trading.

Proving Account Churning in FINRA Arbitration

For most investors, recovering fraudulent investment losses due to account churning involves filing for arbitration with the Financial Industry Regulatory Authority (FINRA). Registered brokers and brokerage firms are required to submit to FINRA arbitration for investor claims, and arbitration provides an opportunity to recover fraudulent investment losses without the time commitment and hassle of going to court. To recover financial compensation for account churning in arbitration, an investor must be able to prove that:

  • The broker had access to and control over the investor’s account
  • The broker engaged in conduct that constitutes excessive trading under SEC Rule 15c1-7 or another applicable provision of federal law
  • The broker acted with the intent to defraud the investor or profit at the investor’s expense

When seeking to recover fraudulent investment losses through FINRA arbitration, it is essential to have an experienced legal team on your side. At Zamansky, LLC our attorneys have decades of experience helping investors secure compensation in FINRA arbitration nationwide. During your free initial consultation, we will examine the transactions in your portfolio to determine whether you have a cause of action for excessive trading (or any other form of investment fraud), and if so, we will take legal action on your behalf at no out-of-pocket cost to you.

Contact the FINRA Arbitration Attorneys at Zamansky, LLC

To learn more about your legal rights as a victim of broker or investment advisor fraud, please contact us to arrange a free initial consultation with one of our experienced FINRA arbitration attorneys. You can reach us by phone at (212) 742-1414, or send us your contact information and we will be in touch as soon as possible.