Series 79 practice questionhardSupervision Requirements
A firm’s written supervisory procedures require escalation of suspected manipulation to the compliance department. A supervisor becomes aware of potential market manipulation but takes no action. What is the likely regulatory result?
- AThe supervisor will only face internal disciplinary measures
- BThe supervisor may be fined or suspended by FINRA for failing to supervise✓ Correct answer
- CThe supervisor will be charged with a criminal violation
- DNo consequence if the manipulation is not proven
Explanation
Why B — The supervisor may be fined or suspended by FINRA for failing to supervise
Failure to supervise and escalate under WSPs can result in FINRA fines or suspension. Criminal charges are possible but not typical, and lack of proof does not shield supervisors from supervisory liability.
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