Suggested Answer:C🗳️
Brokers and dealers are held to a higher standard of care than the average person. They are liable for knowingly or recklessly engaging in excessive trading in customers' accounts, (churning); for accepting funds when they are insolvent, for manipulating the market and for fraud under the shingle theory.
Churning refers to excessive and unethical trading practices in the management of a customer's securities account. This term is commonly used in the context of investment management and securities trading, and it refers to the practice of making a high volume of trades with the primary aim of generating commission income for the broker or advisor, rather than for the benefit of the customer. Churning is considered unethical and illegal because it constitutes a conflict of interest and is detrimental to the customer's financial interests. It is considered a violation of the fiduciary duty that investment professionals owe to their clients, as well as a violation of the rules and regulations set by regulatory bodies such as the Securities and Exchange Commission (SEC).
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KAla7223
1 year, 11 months ago