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Failure to Supervise

Failure to Supervise Stockbrokers

A brokerage firm’s failure to adequately supervise its broker may also result in liability for the brokerage firm. Federal securities laws and NASD and Exchange rules require brokerage firms to reasonably supervise their brokers for the purpose of preventing violations of the rules and regulations of the securities industry.

In order to satisfy its obligations, a brokerage firm must show not only that they had in place supervisory and compliance rules and procedures, but also that they effectively implemented and enforced their compliance rules and procedures so as to diligently supervise the activities of the brokers.

If you believe that your broker was not adequately supervised, and this resulted in losses to your account, contact our lawyers for a full, no obligation, confidential evaluation.