Unit Investment Trust (UIT) Attorneys — Bakhtiari & Harrison

Written and reviewed by

Ryan Bakhtiari, Partner — Bakhtiari & Harrison

Admitted: CA | NY | TX | DC | Multiple Federal Courts · Super Lawyers 2005–2026 · Former PIABA President · Former FINRA NAMC Chairman · Last reviewed: May 2026

UIT attorneys at Bakhtiari & Harrison represents investors in unit investment trust (UIT) claims in FINRA arbitration and securities litigation nationwide. UITs are fixed portfolios of securities with defined termination dates — sold with upfront sales loads of 1-5% and, in many cases, subjected to a systematic pattern of churning in which brokers roll investors from one UIT into the next at each termination date, generating repeated commissions while providing no investment benefit. Ryan Bakhtiari served as Chairman of the FINRA National Arbitration and Mediation Committee and as President of PIABA. Investor cases are handled on a contingency fee basis — no recovery, no fee.

What is a unit investment trust?

A unit investment trust (UIT) is a registered investment company that offers a fixed, unmanaged portfolio of securities for a specified period. Unlike a mutual fund, a UIT does not actively trade its portfolio — the securities are selected at inception and held until the trust terminates, typically after 15 months to 2 years. Investors purchase “units” in the trust and receive their proportionate share of the portfolio’s value at termination.

UITs are sold with upfront sales loads — typically 1-5% of the invested amount — that compensate the selling broker. At termination, the investor receives the portfolio’s liquidation value. If the broker recommends rolling the proceeds into a new UIT, a new sales load is charged.

UIT churning — the most common misconduct pattern

The most pervasive form of UIT misconduct is churning — systematically rolling investors from one UIT into the next at each termination date, generating a new sales load each time while providing no discernible investment benefit. A broker who rolls a $200,000 account through three UITs in 18 months, each with a 3.5% sales load, generates $21,000 in commissions while the investor’s account incurs $21,000 in unnecessary costs.

FINRA and the SEC have both brought enforcement actions against broker-dealers for UIT churning — identifying it as one of the most systematically harmful forms of retail brokerage misconduct. The pattern is particularly common in retirement accounts, where conservative investors are led to believe the rolling strategy is a routine portfolio management practice.

Common UIT misconduct claims

Unsuitable recommendations: recommending UITs to investors who need liquidity during the trust’s term, or whose investment objectives are inconsistent with the fixed, unmanaged portfolio.
Churning through rollovers: systematically rolling investors from terminating UITs into new UITs without an investment rationale, generating repeated sales loads at the investor’s expense.
Misrepresentation of costs: failing to disclose the cumulative cost of a systematic rollover strategy — presenting each rollover as a routine event rather than a commission-generating transaction.
Concentration: placing an excessive portion of a retirement account in a single UIT or a series of UITs with similar underlying holdings.

Frequently asked questions — UITs

My broker rolled me from one UIT to the next every year — is that normal?

It may be normal practice, but it is not necessarily appropriate. Each rollover generates a new sales load — and if the rollover is done without a specific investment rationale that benefits you (rather than the broker), it may constitute churning. Bakhtiari & Harrison can analyze the pattern of UIT rollovers in your account and assess whether the churning standard is met. UIT attorneys

The UIT was held in my IRA — does that matter?

Yes. The tax-deferred status of an IRA eliminates the tax efficiency argument for any investment strategy. When a broker recommends a series of UIT rollovers in an IRA, the only beneficiary of the repeated sales loads is the broker — not the investor. This makes the retirement account context particularly damaging to the broker’s defense.

How is a UIT different from a mutual fund?

A UIT has a fixed portfolio that is not actively managed, a defined termination date, and an upfront sales load. A mutual fund is actively managed, has no termination date, and charges ongoing management fees rather than an upfront load. The fixed portfolio and defined term of a UIT make it appropriate for investors with specific investment needs that match the portfolio — and inappropriate for investors who are rolled systematically from one UIT to the next without regard to their actual needs.

For a full overview of the firm’s investment product failure practice, visit the Product Failure page.

Contact a UIT attorney — free consultation

FINRA arbitration investor cases are handled on a contingency fee basis — no recovery, no fee.

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