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← Series 79: Section 4
Series 79 practice questionhardSupervision Requirements

During an annual review, a compliance officer finds that a branch manager failed to correct repeated policy violations. What is the most likely regulatory concern?

  1. AThe review process itself was inadequate
  2. BThe violations are immaterial if no customer losses occurred
  3. CThe manager may be liable for supervisory failures regardless of client harm✓ Correct answer
  4. DBranch managers are never responsible for staff conduct
Explanation

Why C — The manager may be liable for supervisory failures regardless of client harm

A supervisor may face failure-to-supervise liability for ignoring repeated policy violations even without proven customer loss. Branch managers are not categorically liable for every staff act, but they must reasonably discharge assigned supervisory responsibilities.

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