Churning
Churning is the practice of excessively buying or selling in a customer’s account to generate additional commissions for the broker. Churning is strictly prohibited. Excessive buying and selling means recommending or executing transactions in a customer account that are excessive in size or frequency, given the customer’s suitability information.
Example: Megan, a representative, recommends that a customer, Robert, should roll over his 529 plan into another 529 plan with a better return. Robert agrees, so Megan rolls over the account. Two months later, Megan finds out that another 529 plan has an even better return. She recommends rolling it over again to receive the better return. Robert agrees again, so Megan rolls over the account. The MS