Broker Pressure Scrutinized

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Broker Pressure Scrutinized

Stock-churning will be investigated by the government and the Korea Securities Dealers Association, the Financial Supervisory Service and the association announced Tuesday. Stock-churning is the practice of unnecessarily trading a customer's portfolio to increase a brokerage's transaction fees.

Securities companies will include a letter with this month's statements of accounts to customers, asking them whether their broker has pressured them to increase trading of their accounts. The companies will also ask customers to fill out a questionnaire about the purpose of their stock holdings in order to gather information on customers' investment objectives.
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