Legal Dictionary of Pakistan

churning

n. Securities. A stockbroker's excessive trading of a customer's account to earn more commissions rather than to further the customer's interests; an abuse of a customer's confidence for personal gain by frequent and numerous transactions, disproportionate to the size and nature of the customer's account. 9 Under securities laws, the practice is illegal -a violation of § 10(b) of the Exchange Act (15 USCA § 78j(b)). But because the fraud is the activity as a whole and there is no communication between the broker and the customer about a specific sale of securities, there is not normally a right of action for fraud based on churning.