Potential Red Flags

What this video covers

• The "should have known" liability standard, and why actual knowledge is never required for a firm to be held responsible for representative misconduct
• Why a registered person who never takes vacation is a red flag, not dedication, and how mandatory vacation policies uncover unauthorized activity
• Why personal email, personal cell phones, and personal text messages are all the same violation: deliberately avoiding firm recordkeeping and supervision systems
• How churning differs from legitimate active trading, and why churning provides zero benefit to the customer while generating commissions for the representative
• What concentration risk looks like, and why heavy concentration in a single security or product type triggers immediate firm scrutiny
• Why placing vulnerable customers (elderly or unsophisticated investors) into complex or high-risk products is a compliance violation regardless of the representative's intent
• Why an unusually high volume of complaints against a single representative must trigger heightened scrutiny, and the supervisory failures FINRA most commonly finds in examinations