What is Securities Fraud and Broker Fraud?

Securities fraud and broker fraud is a crime that occurs when deception takes place in the trading of stocks and other securities. Many cases have been brought against stock brokers for fraud and deceptive practices. One such broker fraud crime is known as churning, which occurs when the broker makes transactions in an account for the sole purpose of generating a brokerage commission, rather than for a valid investment purpose. Dealing in patently unsuitable investments for a client can also be an example of broker fraud. If convicted of securities fraud, the broker can be barred from the market, fined, made to disgorge profits, and may even be imprisoned.