Second, it discourages the excessive trading or churning of portfolios, an activity that incurs high transaction costs and diminishes the client's return.

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Brokers' research is often a means to promote excessive trading.

ECONOMIST: Money managers

With respect to the allegation of churning, because we found no evidence of excessive trading and because (except as noted above) the accounts were fee based and thus not generating commissions compensation to Respondent Abadiotakis, there was neither indication of nor basis for an allegation of churning.

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"When (a futures commission merchant's) financial risk controls are so lacking that they do virtually nothing to prevent an unchecked customer from taking grossly excessive trading risks as happened here, a harmful domino effect of financially dangerous consequences can follow, affecting not only the FCM but also potentially other customers and the market at large, " said David Meister, the CFTC's enforcement director.

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If the Committee cannot find an answer to the question of the cost of execution, it will never be able to grasp the extent to which funds pay excessive commissions and fund boards fail to monitor trading costs.

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