The Zamansky & Associates blog has moved!

You should be automatically redirected. If not, visit
and update your bookmarks.

Monday, September 19, 2005

Stockbroker Misuse of Fee-Based Accounts Replaces Churning as a Leading Fraudulent Practice

Investor complaints about their broker's misuse of "fee-based" investment accounts are on the rise as fee-based accounts become the product of choice at major Wall Street brokerage firms. Misuse of fee-based accounts by brokers appears to have replaced "churning" (excessive trading to generate commissions) as a leading fraudulent investor sales practice.

Unfortunately for investors, there are substantial abuses of fee-based accounts, which have prompted securities regulators to take action. Investors have also raised these issues in securities arbitration cases against their brokerage firms.

Rather than being "investor friendly" programs, fee-based accounts often impose disproportionate charges on investors who prefer to buy and hold securities rather than actively trade. In addition, the fee structure accounts give brokers an incentive to engage in anti-investor sales practices. Many also provide little ongoing monitoring services to accounts that are not actively trading.

For more information, please review my recent article in the Wall Street Lawyer which can be found on my web-site at ""


Post a Comment

<< Home