You Can Hold Brokerage Firms Accountable for Failing To Supervise

Brokerage firms have the responsibility to supervise the actions of their employees. When they fail to do so, it can have a significant negative impact on the investors. When brokers and advisors act in a way that is detrimental to investors, the broker, as well as his or her employer, can be held directly liable for any losses the investor suffers as a result.

In fact, FINRA Rules impose a duty to establish and maintain supervisory procedures, specifically FINRA Rule 3010(a), which states: 

3010. Supervision

(a) Supervisory System

Each member shall establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules.  Final responsibility for proper supervision shall rest with the member. …

The U.S. Securities and Exchange Commission (SEC) has held that “the duty of supervision” includes the responsibility to investigate “red flags” that suggest misconduct may be occurring and to act upon the results of such investigation. For example, the SEC has upheld sanctions against supervisors for failure to abide by Rule 3010(a) and supervise brokers offering and selling unsuitable investments.  The SEC has also held supervisors liable for failing to reasonably supervise brokers who had over-concentrated customer accounts in illiquid and unsuitable investments, which were regularly apparent from a review of customer account records. 

Supervision within a brokerage firm can take many different forms, and management’s failure on any front can create grounds for a claim. Among other areas, management should have processes in place for the regular review of investor accounts, quality checks to see that the right products are being recommended to the right investors, audits to ensure that brokers are only selling products approved by the firm, and other considerations.

LOOKING TO LEARN MORE: Click here for related articles about Failure to Supervise.

$21,000,000 Final Judgment for Civil Theft
$8,500,000 Stockbroker Bond Fraud Settlement
$8,200,000 Stockbroker Margin Account Liquidation Settlement
$7,800,000 Stockbroker Option Fraud Settlement
$6,000,000 Stockbroker Bond & Bond Fund Fraud Settlement
$5,800,000 Arbitration Award for Stockbroker Fraud
$5,500,000 FINRA Arbitration Settlement
$5,000,000 FINRA Arbitration Settlement
$4,300,000 Federal Court Class Action Settlement
$3,500,000 Florida State Court Settlement
$3,350,000 FINRA Arbitration Settlement
$3,200,000 FINRA Arbitration Award
$2,750,000 FINRA Arbitration Award
OVER $175 MILLION RECOVERED FOR CLIENTS Contact Our Lawyers for Nationwide Help

Hear From Our Clients

At The Law Offices of Robert Wayne Pearce, P.A., we believe the ultimate barometer of our success is surpassing the expectation of our clients.

The following clients have direct knowledge of our firm's processes from the inside and experienced our fierce advocacy.

Hear From Our Clients

  • "Bob Pearce is the real-life Marvel Hero who fights for small investors against brokerage institutions who manage investors’ hard-earned money carelessly, and even worse, conduct fraud outright."

    Bob Pearce is the real-life Marvel Hero who fights for small investors against brokerage institutions who manage investors’ hard-earned money carelessly, and even worse, conduct fraud outright. For years, we were misled by a brokerage firm who told us they would correct the wrong or compensate us for their mistakes. Only after we started working with Bob, we realized how powerful and wonderful it is to have a top legal expert by your side. Bob is immensely detail oriented, knowledgeable, professional, and confident. We are more than happy with the outcome Bob achieved for us within just a few months. Thank you, Bob!

    - Q Wang -
  • “Robert Pearce is part of that unusual breed of lawyers that are able to create empathy with clients and thoroughly adopt their cause”

    No half efforts here. He and his group of professionals are outstanding strategists that can execute with precise fervor and unyielding determination. Theirs is a huge wave of facts, research, precedents and preparation, that has impressed me in its thoroughness and creativity, and most importantly with the results. No stone goes unturned and no effort is ever spared. In my book, he and they are those of a very rare kind that one wants to keep for a very long time.

    - Ramon Flores-Esteves -
  • “Just like the song from HAMILTON, it's so nice to have Bob Pearce on your side.”

    Just like the song from HAMILTON, it's so nice to have Bob Pearce on your side. He is the consumate plaintiff's lawyer: smart. dedicated, fully able to try a case but a great negotiator in a mediation. He did a wonderful job for us, fully supporting us through the process and more than holding his own against a large national law firm.

    - Maurice Z. -
  • "Mr. Pearce and his staff exceeded all of our expectations."

    Mr. Pearce and his staff exceeded all of our expectations. We were able to reach a settlement that was of our complete satisfaction, all within a very smooth, professional and efficient process. Mr. Pearce is now not only our lawyer but our family friend. We highly recommend him and his team!

    - Severiano L. -
  • "For the best fighting chance, Robert Pearce is the lawyer you want in your corner."

    This law firm is the real deal. We were so lucky that they took our case as they have so much experience in securities and all the wrongdoing that happens in these investment companies where they mislead you and your money (as in our case) into schemes that are not what you think they are. Mr. Robert Pearce is one of the best lawyers around, a truly professional who will fight for you and will tell you as it is all the time. We could not have gone thru this experience if it was not for all the advice, guidance and support he and all of his staff and associates brought to the game. For the best fighting chance, Robert Pearce is the lawyer you want in your corner.

    - Astrid M. -
  • "He never felt intimidated and his study of the case and perseverance prevailed at all times."

    Attorney Robert Pearce was our lawyer in a case against a Brokerage Firm and I'm witness to his ability and intelligence to deal with lawyers from the most prominent law firm in New York which was the key to recovering much of our losses cheered by their negligence. He never felt intimidated and his study of the case and perseverance prevailed at all times.

    - Jose A. C. -
  • "In the end, Bob and I had the last laugh when the arbitrators awarded me almost 6 million dollars."

    No lawyer except Bob said I had a chance of winning. When UBS Lawyers laughingly offered me zero to settle the dispute, Bob became even more determined to prove everybody wrong. Bob was extremely prepared, and always a step ahead of the opposing attorneys throughout the arbitration. In the end, Bob and I had the last laugh when the arbitrators awarded me almost 6 million dollars.

    - J. Blanco -
  • "Every meeting and phone call was made with dedication and desire to help our family every step of the way."

    Robert's team is excellent. They are very competitive in what they do and they are very responsible. Every meeting and phone call was made with dedication and desire to help our family every step of the way. Their professionalism, responsibility and empathy assured us that we were in good hands. Recommend to everyone.

    - Mayra A. -

FREE INITIAL CONSULTATION WITH ATTORNEYS WHO KNOW ALL ABOUT SUPERVISION

These cases can be quite complex, and the brokerage firms will go to great lengths to avoid responsibility for your losses. Be sure that you have an experienced brokerage failure to supervise lawyer with the commitment and skill to take on any brokerage firm, no matter how large or powerful. The Law Offices of Robert Wayne Pearce, P.A., has successfully represented clients in all types of negligence and failure to supervise claims throughout Florida and nationwide. Please contact our law office online or call 1-800-732-2889 to schedule your free consultation.