Supervision and Compliance of Brokerage Firms

Christine Lazaro, St. John's University School of Law

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Reprinted with the permission of Public Investors Arbitration Bar Association (PIABA).


Supervision is a cornerstone of broker-dealer regulation. It serves a number of important goals: primarily ensuring that the firms follow the governing rules and regulations so that investors can have confidence in the firms with which they do business. Unfortunately, FINRA supervision rules often do not set out specifically how a firm is to supervise its brokers. This article will set forth the general supervision rules governing brokerage firms, as well as the rules that govern specific behavior and conflicts.