Excessive Trading in Customers' Accounts | Brokers' Conduct | Test Prep

Excessive Trading in Customers' Accounts

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Question

Brokers who knowingly or recklessly engage in excessive trading in customers' accounts are known to be ________.

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A. B. C. D. E.

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.