Churning is the name for the practice by unscrupulous stockbrokers who make excessive stock trades on behalf of their clients, not in effort to maximize the profit of their clients, but to maximize their own fees for making the trades since the stockbroker gets paid every time he or she makes a trade.  Recently the Securities and Exchange Commission (SEC) barred former financial adviser Paul T. Lebel from acting in the future as a broker or investment adviser due to his having fraudulently churned accounts of some of his clients in a manner that was inconsistent with their investment objectives, but instead maximized his fees as a broker.  Lebel did not contest the action taken by the SEC although he did not admit guilt.


Some people give their investment advisers too much authority when it comes to executing trades on their behalf.  It rarely makes sense to give your stockbroker the authority to trade whenever he or she wants.  Make sure that you make the final decision on any recommended trade.   More importantly for everyone, you should carefully read your monthly brokerage statement.  Many people fail to do so because the monthly statements may appear to be too confusing and end up missing early evidence that their account is being manipulated by a financial adviser churning their account.