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Finance Dictionary and Glossary of Investment Terms
Excessive broker trading in a discretionary account. Underwriters persuade brokerage clients to purchase some part of a new issue in return for the purchase by the underwriter of other securities from the clients at a premium. This premium is offset by the underwriting spread.
Excessive trading in a client's account by a broker seeking to maximize commissions regardless of the client's best interests, in violation of NASD rules. also called twisting or churning.
1. Excessive buying and selling of an investors stocks by their broker, also known as churning.2. When a company is growing its sales faster than they can finance them, this usually leads to enormous accounts payable.