A broker makes ten trades on an account for the purpose of generating commissions. The broker may be guilty of _______.
A) Fraud
B) Hypothecation
C) Churning
D) money trading
E) call trading

Question

Quizplus · Accepted Answer

Churning refers to a broker making excessive trades solely for the purpose of generating commissions, rather than for the benefit of the client. This is considered a fraudulent practice and is a violation of securities laws.

A Broker Makes Ten Trades on an Account for the Purpose