Case Studies


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Small Business Relied on Authorization Number

Posted on Friday, November 12, 2004 12:45 PM

An established merchant specializing in product sales through telemarketing decided to begin accepting credit card payments. His bank set up a merchant credit card account during a brief exchange over the phone and he was faxed documents to sign.

In part of the bank's material sent to the merchant, it said that obtaining an authorization number for each transaction would protect the merchant against fraud. In another place, it said that the merchant must obtain an imprint of the card and the cardholder's...

Investor Complained Advisor Traded Too Frequently

Posted on Thursday, December 11, 2003 03:00 PM

The investor, a client of a full-service investment dealer, conducted more than 200 trades in an eight-month period. He then moved his account, claiming that he had suffered losses as a result of the advisor “churning" his account. (Churning is excessive trading by an advisor to maximize commissions.) The investor also said the stocks bought and sold were overly concentrated in the volatile high tech sector.

When we looked at the complaint, we agreed that the account was frequently traded and highly...

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