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Massachusetts Regulator Accuses Broker-Dealers of Not Properly Supervising Rogue Brokers
According to the Massachusetts Securities Division, brokerage firms that hire brokers with troubled disciplinary records are not doing a proper job of supervising them. The state, which recently released its findings from its examination of 241 broker-dealers who are registered in the state and retain an above average number of rogue brokers, said that this relaxed way of self-policing could be harming investors.
According to the division’s report, not a lot of these brokers were put on more rigorous supervision despite their questionable pasts. Massachusetts Secretary of the Commonwealth William Galvin said that it appeared to his office that certain firms were not willing to take on the duty of “zealously monitoring” the way these brokers were interacting customers.
It was in June that the Massachusetts Securities Division announced it was cracking down on broker-dealers who hired rogue brokers. The news of its sweep came soon after the Financial Industry Regulatory Authority announced it was conducting its own probe.