Churning


Also found in: Dictionary, Thesaurus, Medical, Legal, Idioms, Encyclopedia, Wikipedia.
Related to Churning: Churning butter, churning out

Churning

Excessive trading of a client's account in order to increase the broker's commissions.

Churn

To make both buy and sell orders through different brokers, usually in large quantities, to create the impression of increased interest in a security and thereby raise its price. An investor churns if he/she has a long position on the security and wishes to sell it at an artificially high price. Churning is a form of manipulation, and is illegal under the Securities Exchange Act of 1934. See also: Fix.

Churning.

If a broker intentionally mishandles buying and selling securities in your investment account, it's known as churning.

The broker might buy and sell securities at an excessive rate, or at a rate that's inconsistent with your investment goals or the amount of money you have invested.

One indication of potential churning is that you're paying more in commissions than you are earning on your investments. Churning is illegal but is often hard to prove.

References in periodicals archive ?
Churning is also a problem in the mutual fund industry.
But just because churning is simple doesn't make it right.
11Ants Customer Churn Analyzer gives marketers a range of tools to understand a customer's likelihood of churning.
I never understood my fascination with churning until recent years.
You can eat homemade ice cream just after churning, but it will be a bit soft -- and not hard enough to scoop.
Dreyer's has explained that while the new light ingredients match those in the current Dreyer's/Edy's Grand Light, slow churning the ice cream kneads fat molecules at a colder temperature, stretching and distributing them widely so the ice cream tastes like it contains more butterfat.
In fact, churning cost the nation's largest dial-up ISPs at least $10 billion last year alone.