Escalation Upon Discovery of Prohibited Activity

What this video covers

• The three-step supervisory framework: recognize, investigate, escalate, and why waiting for definitive proof before acting is itself a failure
• The internal escalation ladder from trading desk supervisor to Chief Compliance Officer (CCO), legal, senior management, and board/audit committee
• When a written customer complaint alleging theft or misappropriation triggers external regulatory event reporting regardless of dollar amount
• Form U4 amendment obligations via Web Central Registration Depository (Web CRD) and Suspicious Activity Report (SAR) filings to the Financial Crimes Enforcement Network (FinCEN)
• The 30-day regulatory-event reporting deadline and when quarterly reporting applies
• Why manipulation or front-running discoveries require freezing trading immediately and preserving records under a litigation hold the moment suspicion arises
• Why a supervisor's failure to escalate is a separate supervisory-system failure, distinct from the underlying trading violation