Failure to Supervise
Connecticut Stock Broker Fraud Attorney
If you suspect that your broker or brokerage house failed to supervise your account, it is important to act quickly and contact an attorney right away. Over time, memories can fade and evidence can go missing. The more quickly you act to protect your finances, the greater chance you have of recovering your losses.
At Edward W. Vioni, Attorney at Law, LLC, we have the knowledge and resources to handle complex failure to supervise cases and other stock broker fraud issues. As a former broker and former compliance officer for a brokerage firm, attorney Edward W. Vioni is committed to helping investors recover their losses and become whole again.
What Is Failure to Supervise?
Brokerage houses have a duty to supervise the brokers, traders and other types of financial advisors that they employ. Failure to supervise is a violation of FINRA rules, but this violation does not give rise to a separate claim. Instead, failure to supervise often highlights other issues such as fraud by an unsupervised broker. It may also point to an "omission" by a supervisor or brokerage house in failing to disclose to an injured investor that the broker was unsupervised.
Holding a Brokerage House Accountable
To hold a brokerage house accountable for a broker's action, our firm will need to show that the brokerage house knew or should have known about the broker's actions. Also, we must be able to show that the brokerage house had the actual ability to control or influence the controlled agent and did not use that ability.
In cases where a failure to supervise has been successfully proven, brokerage house liability for failure to supervise often comes from principles of what's called an "employer's vicarious liability." This liability is found in "Agency" rules, where someone acts as an agent (the broker) with apparent authority (from the brokerage house). Investors who reasonably rely on this authority are often entitled to hold the brokerage house liable.
In addition to vicarious liability, 20(a) of the Exchange Act of 1934, 15 U.S.C. 78t(a) also says there's a definite duty to supervise, or disclose otherwise to the investor:
"Every person who directly or indirectly controls a person liable under any provision of this chapter or any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlling person acted in good faith and did not directly or indirectly induce the acts or acts constituting the violation or cause of action." 15 U.S.C. 78t(a).
This is not always a difficult threshold of proof for a wronged investor. What is often difficult is acting quickly enough to protect the investor.
Contact an Experienced Stockbroker Fraud Lawyer
Do not wait until it is too late. Turn to Edward W. Vioni, Attorney at Law, LLC, for experienced and knowledgeable representation in stock broker fraud cases. We will work to protect your rights as an investor and pursue damages for the losses you have faced as a result of a brokerage house's failure to supervise.
Call our Norwalk law offices today at 203-326-1229 to schedule a free consultation with stockbroker fraud law attorney Edward W. Vioni.