When It Comes to Regulatory Compliance, Ignorance is Not Bliss

Here’s a hypothetical – you’re a broker-dealer CCO. In your supervisory position, you discover a red flag, e.g. an electronic communication that could potentially be some form of misconduct. If you fail to investigate the red flag, should you be culpable for failure of proper supervision even if such inquiry or investigation wouldn’t have uncovered the misconduct? An Appeals Court decision may have answered that question in a way that runs contradictory to precedent.

ThinkAdvisor – Appeals Court Disregards FINRA Rule in CCO Case

US Court of Appeals – North v SEC