The rationale for holding a brokerage firm responsible for the misconduct of its registered representative is self-evident. A brokerage firm directly receives financial gain from the activities of its brokers. The duty for a brokerage firm to monitor and supervise the activities of its registered representatives is two-fold: first, adequate procedures must be in place; second, the procedures must be used. Failure to supervise claims can be made for misconduct.
Brokerage firms are legally required to implement adequate compliance and supervisory policies and procedures that are reasonably designed to achieve compliance with applicable securities regulations. Failure to do this is failure to supervise. In addition to having appropriate systems in place, a brokerage firm must follow those systems and monitor the activities of its employees.
If you believe that you have failure to supervise claim against your broker’s firm, or that you may have been a victim of any type of securities fraud, you have certain rights which you should be aware of, rights which may provide you an opportunity to recover your losses from your stockbroker or brokerage firm. Please contact Loya & Associates so that we can review your case.