Charles C. Mihalek, PSC

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Churning

Churning refers to excessive buying and selling of securities in your account by your broker. For churning to occur, your broker must exercise actual or de facto control over your account and must engage in excessive trading in light of the financial resources and character of the account for the purpose of generating commissions.  Churning can be quantitatively measured by calculating an account's turnover ratio or cost-to-equity ratio.

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