What is that in stock?
Churning is an illegal practice where the broker repeatedly trades with certainty to generate commissions. This practice is most common in situations where the broker has full access to the account and can carry out shops without informing the account holder. Every time the broker carries a trade on behalf of the investor, he receives a predetermined commission. If the intermediary trades with certainty several times a month, it will reduce the investor's profits and destroy the investment.
In order to perform inventory, the broker needs full access to the account. In most cases, this means that the broker manages something like a fund, an investment account or a pension package. In such cases, the broker receives the amount of money and invests, as he considers it appropriate. The broker makes a decision on when the securities should be purchased or sold, and as a result it determines when they receive a commission.
In most cases, these investments are designed to provide a low but continuous yield for a long time. This means that to maintain profitableVery few trades are required. A joint investment of this style will have an average of about one trade per month. This is evidence of the stability of the investment and the way to increase the yield through low mediation fees.
If the broker is involved in shares, the number of transactions is much higher. In most cases where the intermediary kills stocks, they try to make as many shops as possible to maintain the total profitability in the area; In fact, the investment does not investigate or lose money. In this way, the investor will not notice that something is wrong, because he seems to lose any money.
Assessment of the number of transactions in the account is the primary method of proving shares. When an external expert examines the account, he generally focuses on two things - the number of shops and the profitability of securities. A high number of shops is often the first main red flag - any number over fiveIn a month it is generally worthy of appearance. Then the examiner focuses on the profitability of traded securities and sees whether any securities have been sold and purchased during a small amount of time.
If the broker is found guilty of swirling shares, he is responsible for two main money amounts and is likely to face any prison. They must repay any brokerage fees that are considered over the number of account maintenance. In addition, he must pay off the approximate amount he would have created if he did not control it. Most settlements also include a large amount of damage to the investor.