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What happens if my brokerage firm does not supervise my financial advisor?
If you sustain losses due to the actions of your broker and those actions would have been prevented if the brokerage firm would have properly supervised the broker, you may be able to recoup your losses from the brokerage firm.
It may seem like common sense, but all employers have some duty to supervise its employees while they are working. Unfortunately for many investors, Wall Street broker-dealers and financial institutions often fail to adequately monitor the actions of their financial advisors, which in turn can cause devastating losses to an investment portfolio.
Brokerage firms are responsible for making sure that their employees comply with applicable securities laws, rules and procedures, and making sure that investment accounts are being handled in accordance with your investment objectives and risk tolerance. They are also responsible for making sure that their employees are properly trained and have passed applicable industry exams. Broker-dealers also must take steps to review the advice given by their advisors and monitor the actions taken by the advisors on behalf of their clients.
FINRA Rule 3110 and former NASD Rule 3010 (which was in effect through July of 2015) states that a securities brokerage firm is required to establish and maintain supervisory procedures to adequately supervise their financial advisors, stockbrokers, and registered representatives. If a broker’s misconduct, fraud, malfeasance or negligence causes losses to an investment portfolio, the broker’s firm may also be liable for investment losses based on its failure to properly supervise an advisor.
Most securities claims against brokerage firms for failure to supervise are handled in FINRA arbitration. If you believe that a broker, dealer or a financial institution’s failure to supervise its employees has caused you investment losses, it is imperative to contact an experienced investment loss attorney to discuss your rights. Israels & Neuman PLC has knowledgeable securities attorneys that represent investors who have suffered losses due to the actions of brokers, financial representatives, broker-dealers, and financial institutions. We have represented numerous victims of unsupervised brokers in FINRA arbitration proceedings across the country.
All of our financial arbitration cases are taken on a contingent fee basis, meaning that we do not get paid unless we recover compensation for you.
DO YOU FEEL YOU HAVE SUSTAINED LOSSES DUE TO A FIRM’S FAILURE TO SUPERVISE ITS BROKER OR FINANCIAL ADVISOR?
Aaron Israels: (720) 599-3505
David Neuman: (206) 795-5798