Panel dismisses claims and blames customers for broker’s selling away activity.

The claimants filed claims against the broker-dealer respondent in which they alleged that the respondent had failed to supervise their broker, resulting in an unsuitable recommendation by the broker to the claimants. The Panel ultimately denied the claimants’ claims, concluding that the respondent “acted diligently and responsibly under all circumstances presented.” Specifically, the Panel determined that the selling away activity was unknown to the respondent, despite their “robust compliance program,” which included a review of all email traffic between brokers and clients and all facsimile communications exchanged. The Panel further found that the claimants had actually assisted the broker in concealing the selling away activity by exchanging emails with him on a non-approved email account and by using outside bank accounts to fund the unapproved investment. Thus, the Panel dismissed the claimants’ case and assessed all forum fees against the claimants.

_{Case Law Alerts, 2^nd Quarter, April 2015}

_{Case Law Alerts is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2015 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.}