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May 12, 1993|From Times Staff and Wire Reports

Firms Liable for Telephone Fraud: Securities firms can be held partially liable for any losses resulting from fraudulent telephone transactions, the Securities and Exchange Commission said after a yearlong review. Last year, the SEC staff questioned the practice of some investment companies that disclaim all liability for telephone trading or redemptions of securities that aren't authorized by investors. From now on, a fund must include in its prospectus and in telephone solicitations a description of the procedures it follows for phone transactions and a statement that the procedures are genuine, the SEC said.

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