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Failure to Supervise

From Jenice's interview for the Masters of the Courtroom series on
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A failure to supervise occurs when a firm fails to adequately supervise its employees’ activities and even the firm’s operations. A failure to supervise in the brokerage firm context occurs when a firm’s senior personnel fail to properly review and monitor the brokers' work. If you notice all your investments behave differently than you were told, your brokerage firm may have failed to supervise your broker. A New York FINRA failure to supervise law firm like Malecki Law can review the circumstances around your portfolio, brokerage firm, broker, and investments at no cost. FINRA has implemented three supervision rules that brokerage firms must follow, FINRA Rules 3110, 3120, and 3130.

Under FINRA Rule 3110, your brokerage firm must have adequate written supervisory procedures (WSPs) in place, to properly supervise associated persons, such as your broker. Under FINRA Rule 3120, your brokerage firm must have a system of supervisory control policies and procedures (SCPs) in place to test its supervisory procedures. Under FINRA Rule 3130, your brokerage firm must provide key information to FINRA regarding its supervisory procedures and its compliance with relevant securities rules and laws.

Moreover, if an associated person has a history of misconduct, your brokerage firm should place them under heightened supervision. If your broker had a history of misconduct, and your firm failed to place them under heightened supervision, you may have a claim. A New York FINRA failure to supervise attorney at Malecki Law can evaluate the situation in a free consultation. If the firm fails to evaluate the adequacy of this heightened supervision, it can rise to a failure to supervise as well.

Failure to supervise claims typically arise when a broker engaged in misconduct, and the firm was either aware of the red flags and failed to prevent the misconduct or its supervisory procedures failed to detect and prevent the misconduct. Examples of misconduct a broker might engage in are as follows: unsuitability, Ponzi schemes, selling away, and forgery. If it seems as though your broker engaged in one of the aforementioned examples of misconduct, it is possible that your brokerage firm failed to supervise your broker. A FINRA failure to supervise lawyer in New York at Malecki Law knows the relevant rules. By way of example, a failure to supervise claim against a brokerage firm may arise if its broker physically conducted a Ponzi scheme out of the firm’s office. Another instance of failure to supervise may occur if a broker continuously forged their clients’ signatures to execute unauthorized trades. In these scenarios, the brokerage firm should have been aware, or made aware by adequate supervisory procedures, of the red flags to prevent investors from being financially harmed.

Regulators hold firms accountable for misconduct related to failures to supervise. For example, the SEC investigated and charged Morgan Stanley Smith Barney LLC (MSSB) for failure to monitor and safeguard its devices and customer information. If you notice any signs of broker misconduct that your firm disregarded or failed to prevent, you may have a failure to supervise claim. Contacting a New York FINRA law failure to supervise law firm like Malecki Law, will help you evaluate your case. At no cost, Malecki Law will help determine whether you have a viable failure to supervise claim. MSSB failed to monitor a moving company it hired to dispose of devices containing sensitive customer information. The SEC found that the moving company had in effect sold the customer information to a third party. As a result, about fifteen million customers of MSSB had their information exposed. As a customer of a firm, you entrust financial professionals with your personal information and money, among other things. Thus, MSSB had broken the trust of many customers. Had the firm properly supervised the moving company it hired, millions of the customers’ personal information would not have been sold for profit, ending up in the wrong hands.

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I highly recommend Jenice and her team at Malecki Law. I had a challenging, and lengthly case. Jenice was professional, very knowledgeable, and a pleasure to work with. She managed to make the process far less stressful during a very difficult time. They care about their clients, and it definitely shows. Mario
Jenice is truly a miracle worker and one of the top securities lawyers. She handled a very difficult case for us, displaying her legal knowledge, intelligence, and savviness throughout the process. I cannot recommend her enough. The quality of work from her team rivals that of corporate law firms. She was always available, extremely professional, and made sure to know all the details of the case. We were very fortunate to have been referred to Jenice and highly recommend her for any securities related legal issues. Nathan A.
An excellent professional who represented us in trial regarding a bank fraud, an unexpected and difficult time. A professional that worked hard, persevering and who stood toe to toe against firms that had a team of excellent lawyers backing them up. Her unflinching determination really stands out, it makes you feel you have someone who really cares about trying to recover what you lost from the people that wronged you. Salomon Levi
It is difficult to thank you in words when gratitude comes from the heart, so I will try to link feelings with writing. It is essential for us to mention your excellence as a professional, your aptitude on legal fields, and your unavoidable persistence. All of these virtues that elevate the profession you exercise in such an admirable way, go hand in hand with your sense of ethics, your human warmth and the transparency in your actions. To sum up, thank you for being a listening ear and for having the right word while transmitting information about the legal process. Having you as our representative during such an adverse situation was a privilege and enough reason for our eternal gratitude. Angeles Aparain
To say that my securities litigation was complex would be a severe understatement. With multiple parties involved and spanning many years, trying to understand the issues was daunting to say the least. Jenice and her team broke down the transactions by segment and by party uncovering every hidden expense. In the end, I was more than happy and could not thank Jenice and her team enough. I would not hesitate to recommend Jenice to anyone. She is highly professional, incredibly knowledgeable, well connected to industry experts, has a tireless work ethic and is so pleasant and easy to communicate with. Five stars for sure! Andrew Loughrane