What illegal practice involves excessive trading to increase broker commissions?

Churning is the practice where a broker excessively buys and sells securities within a client's account to generate higher commissions for themselves, rather than engaging in transactions that are in the best interest of the client. This behavior is considered unethical and is illegal because it disregards the customer's needs and can lead to significant losses for the investor due to unnecessary fees and taxes associated with frequent trading.

Unlike insider trading, which involves trading based on non-public information to gain an unfair advantage, churning focuses on the broker's actions rather than the information on which trades are based. Margin trading refers to the practice of borrowing funds to trade more significant amounts of stock than the investor's available capital, while speculation involves making high-risk investments with the hope of significant returns. These terms pertain to different aspects of trading and investing, making them distinct from churning.