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Failure to Supervise

Are Brokerage Firms Responsible for the Misconduct of the Financial Advisor They Employ?

Yes. Brokerage firms are responsible for the activities of their employees and financial advisors when acting within the course and scope of their employment. The Financial Industry Regulatory Authority (FINRA) requires that all brokerage firms implement a reasonable system of supervision that is designed to detect unsuitable investment activity, unusual withdrawals, account losses, or portfolio concentration. It is the responsibility of brokerage firm management to ensure that the account activity is consistent with the needs and objectives of the investor. If “red flags” are (or should have been) detected, the brokerage firm has a regulatory responsibility to take corrective action in order to protect the investor.

Brokerage firms are also responsible for monitoring the outside business activities of their financial advisors. For example, if a financial advisor is involved in a privately held business outside of the normal course and scope of his or her employment, the brokerage firm is responsible for ensuring that the financial advisor does not involve customers of the brokerage firm in any such outside business activity whether it be for investment purposes, lending, etc. Such conduct is referred to as “selling away” and is strictly prohibited by FINRA rules and the internal policies of brokerage firms.

The failure to effectively create and implement a reasonable system of supervision violates FINRA rules and may form the basis of a cause of action.

Contact an Attorney Who Understands A Brokerage Firm’s Legal Obligations To Its Customers

The Wolper Law Firm has extensive experience handling cases involving failed management supervision. If you have experienced losses in your investments, please contact the Wolper Law Firm for a free consultation and case evaluation so that we may determine if failed management supervision was a contributing factor in your investment losses.

Call (954)-406-1231 to schedule a free, no-obligation consultation today.

Now is the time to talk to an investment loss recovery lawyer. We can help recover your investment loss. Free consultations, always.

Main Office - Fort Lauderdale

1250 S. Pine Island Road
Suite 325
Plantation, FL 33324
Phone: (866) 330-5167
(954)-406-1231

We represent clients nationwide, including, but not limited to: Miami, Boca Raton, West Palm Beach, Sarasota, Tampa, Stuart, St. Petersburg, Vero Beach, Orlando, Jacksonville, Austin, Houston, Dallas, Washington DC, Charlotte, Boston, Baltimore, Phoenix, Scottsdale, Las Vegas, Los Angeles, San Diego, San Francisco, Chicago, Seattle, Portland, Denver, Salt Lake City, Fargo, Atlanta, Little Rock, Newark and St. Louis

Additional Office Locations (by appointment only)

Atlanta

3355 Lenox Road
Suite 7
Atlanta, GA 30326

Indianapolis

13295 N. Illinois St.
Suite 314
Indianapolis, IN 46032

New York City

275 Madison Avenue
Suite 705
New York, NY 10016

Dallas

3102 Maple Ave.
Suite 400
Dallas, TX 75201

Irvine

2600 Michelson Drive
Suite 1700
Irvine, CA 92612

Portland

5933 NE Win Sivers Drive
Suite 205
Portland, OR 97220

Denver

7900 E. Union Ave.
Suite 1100
Denver, CO 80237

Naperville

1700 Park Street
Suite 103
Naperville, IL 60563

Seattle

1001 Fourth Ave.
#3200
Seattle, WA 98154

We represent clients nationwide, including, but not limited to: Miami, Boca Raton, West Palm Beach, Sarasota, Tampa, Stuart, St. Petersburg, Vero Beach, Orlando, Jacksonville, Austin, Houston, Dallas, Washington DC, Charlotte, Boston, Baltimore, Phoenix, Scottsdale, Las Vegas, Los Angeles, San Diego, San Francisco, Chicago, Seattle, Portland, Denver, Salt Lake City, Fargo, Atlanta, Little Rock, Newark and St. Louis