Broker Dealer Solutions
 

Account Churning

Trader InvestigationsAccount churning (inappropriate or excessive trading used to generate commission income for the broker) is a violation of Rule 10b-5 as a scheme or artifice used to defraud securities customers. Account churning can also be a violation of applicable state securities law. Supervisors and firms of registered representatives who have been found guilty of account churning have been held liable for failure to supervise, forced to relinquish profits and commissions, and made to pay damages to customers.

B/D Solutions Consulting can provide reports to Branch Office Managers, OSJ Managers, or Chief Compliance Officers who are concerned about possible account churning by registered representatives under their supervision. Varying measurements of account activity can make it difficult to decide "how much is too much?" B/D Solutions uses statistical analysis of Turnover Ratios, Commission-to-Equity Ratios, and Cost-to-Equity Ratios to determine which representatives and accounts are vulnerable to account churning allegations.

B/D Solutions can also discreetly investigate suspected cases on a trade by trade basis and provide the supervisor with a confidential report. This can be done in support or anticipation of arbitration hearing, litigation, or in conjunction with your Branch Office Audit Program.

Contact us today to find out more.

B/D Solutions Consulting • 4060 Peachtree Road,
Suite D #322 • Atlanta, GA 30319 • 877-423-4636 • Copyright © 2004
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