Churning is a manipulative and deceptive practice in violation that violates Section 10(b), Rule 10b-5 thereunder, and FINRA Rules 2020 and 2010. It is fraudulent conduct that occurs when: (i) a registered representative controls trading activity in an account, (ii) the level
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Farrar Law PLLC Investigating Claims of Excessive Trading
Excessive buying and selling of securities in an investor’s account, also known as churning, is not only unethical, but also violates securities laws. Most, if not all, churning stems from the broker’s desire to generate commissions that benefit the broker. …
Alphabet Soup – Who Are These People?
Long names call for shorthand. Here is a list (by no means exhaustive) of acronyms for investment and finance-related entities, which you might come across in this blog or elsewhere:
- ACLI – American Council of Life Insurers. ACLI is an
Alphabet Soup – Some General Terms that Might Get Thrown Around
Investing has its own language, including beloved acronyms and shorthand. Here’s a list (by no means exhaustive) of general terms you might hear thrown around in this blog or elsewhere:
- AUM – assets under management, which is the total market
FINRA Publicizes Recent Cases of Unauthorized Trading
Working under the supervision of the SEC, one of FINRA’s tasks is to write and enforce rules governing the ethical activities of brokerage firms and brokers. With respect to discretion, FINRA Rule 3260(b) (aka NASD Rule 2510(b)) provides that for…
Discretion – Who Has the Power to Choose?
Merriam-Webster defines discretion as “individual choice or judgment.” In the investment arena, discretion similarly refers to the exercise of judgment. When the customer makes all the trading decisions in the account, then the account is non-discretionary. In contrast, a discretionary account…
Possible Signs of Mischief
What are the possible signs of fraud or other misconduct in your account? Here are some potential red flags:
- Big drops in the value of your portfolio, particularly when these dips don’t follow the market or seem exaggerated in comparison
Remind Me Again Why I’m Arbitrating — And Who the Heck is FINRA?
Investing is complicated – that’s probably the primary reason you chose to work with a broker. Unfortunately, despite one’s best efforts, things may have gone disastrously awry. Now, you are sitting down to a late night Google session and attempting…