" In matters of truth and justice, there is no difference between large and small problems, for issues concerning the treatment of people are all the same." - Albert Einstein

Failure To Supervise

The Financial Industry Regulatory Authority (FINRA) requires the brokerage firm to have a supervisory system to monitor the activities of its associated staff and members. Any failure to comply with this rule would attract punishment and penalty from the market regulators.

Supervisors are obliged to respond vigorously to any iota of irregularity. A supervisor cannot ignore or disregard any wrongdoing and must take decisive action to identify and stop the inappropriate activity.

Brokerage firms are responsible for

  • Monitoring all investment recommendations
  • Factual representation of ideas
  • Disclosure of risks and other current market factors
  • Any conflict of interest
  • Conducting due diligence on the products they sell
  • Devise a rigid supervisory system in compliance with the securities law

There are instances in the past where the brokerage firms have been pulled up by the market regulators for not complying with the supervisory law. It may be difficult for individual investors to keep a check on such compliance. But it wouldn't hurt to check on such compliance once in a while with the brokerage firm. If you feel the brokerage firm has not done enough to have checks and balances to supervise their staff and members then please do not hesitate to reach out to us. We would be more than willing to assist you in confronting the brokerage firm.