If you haven't heard of investment "churning" before, you're not alone. Think of the propellor of a boat that's still tied to the dock. It spins around and around, spewing up water but going nowhere. Now take that image and apply it to your investment account. Churning is a technique that crooked brokers use to generate sales commissions through excessive trading in an account, resulting in diminishing the account's value.
We came across a recent case of churning--one of the most egregious we've ever seen--here. According to ruling issued by FINRA, Oppenheimer and Co. Inc. and two of its brokers astonishingly generated more than $500K in commissions on a portfolio valued at $2M over only a 2 1/2 year period.
While sales commissions ideally account for 3-4% of the portfolio's value, in this case it was more like 20%. The claimant, a successful business owner in Texas, sought $4M in damages. The FINRA panel has awarded only $848,000 in damages, $174,000 in legal fees, plus interest and costs.
f you think you have been the victim of churning, please contact us immediately to review your legal rights. The Green Firm not only has experience handling cases involving churning, but we are pleased to note that we ourselves often work with the renowned expert economist mentioned several times in the article, Mr. Craig McCann. Big shout-out to Craig!