If you have suffered any investment loss, call The Frankowski Firm to review the cause of the loss. You can reach us at 888-741-7503 or through our contact form.
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Financial advisors and securities brokerage firms have a legal duty to monitor the actions and recommendations of their brokers to make sure the broker is complying with both FINRA rules and state and federal securities laws. When a broker dealer fails to supervise a broker’s conduct, the firm can be held liable for its failure to supervise.
The Frankowski Firm’s attorneys usually bring two claims when a firm fails to watch over broker misconduct for fraud. The first claim is an action against the broker for negligence or securities fraud. The second claim is against the brokerage firm or supervisor for failing to oversee the broker. We handle complex supervision claims for investors throughout the country.
Stockbrokers are supervised by branch managers or branch office managers (BOMs). The BOM has a duty to make sure the brokers they oversee compliance with regulatory rules and internal sales practice rules:
When broker negligence or misconduct occurs, the BOM should create a written record of the broker’s conduct. Our lawyers often use this written record to prove a case against the broker or firm.
Another way our firm can prove that the brokerage firm’s supervision of the broker was deficient is by examining a computerized database called a Central Registration Depository (CRD). The CRD contains record of a broker’s past conduct/misconduct. The CRD data can be obtained by running a broker check through FINRA’s website or contacting the relevant state regulator of securities.
If you have suffered any investment loss, call The Frankowski Firm to review the cause of the loss. You can reach us at 888-741-7503 or through our contact form.
If a brokerage firm fails to supervise its broker, the firm can be held legally responsible for any resulting misconduct or investor losses. FINRA rules require firms to monitor broker activity, including trades, communications, and client accounts. A failure to supervise claim allows harmed investors to pursue compensation from the firm—not just the individual broker.
Yes, if your losses were caused by broker misconduct or negligence—and the firm failed to monitor that behavior—you may be able to sue the brokerage firm for failure to supervise. These cases typically involve FINRA arbitration or legal claims based on securities fraud, breach of duty, or regulatory violations.
FINRA Rule 3110 outlines a firm’s obligation to establish and maintain a supervisory system. This includes reviewing broker communications, trades, customer complaints, and ensuring compliance with both internal and regulatory standards. If a firm ignores red flags or allows misconduct to continue, it may be in violation of Rule 3110.
SIPC (Securities Investor Protection Corporation) coverage protects customers if a brokerage fails financially, but it doesn’t cover losses from fraud or bad investment advice. Legal action against the broker or firm may be your best path if misconduct caused your investment losses.
You can file a complaint with FINRA or the SEC, but if you want to recover lost funds, it’s best to speak with a securities fraud attorney. An experienced failure to supervise lawyer can help you gather evidence, file arbitration claims, and hold the broker or firm accountable.
The recoveries, verdicts, favorable outcomes, and testimonials described on this site are not an indication of future results. Every case is different, and regardless of what friends, family, or other individuals may say about what a case is worth, each case must be evaluated on its own facts and circumstances as they apply to the law. The valuation of a case depends on facts, the damages, the jurisdiction, the venue, the witnesses, the parties, and the testimony, among many other factors. No representation is made that the quality of the legal services performed is greater than the quality of the legal services performed by other lawyers.
Disclaimer: Mr. Frankowski is licensed in Alabama,Florida and Texas. He is not licensed in any other state including Nevada and California. Mr. Frankowski has represented investors from all over the country in securities cases including: Alabama, California, Colorado, Florida, Georgia, Illinois, Kentucky, Louisiana, Mississippi, Nevada, New Mexico New York, North Carolina, Tennessee, Texas.