Should brokerage firms be required to warn clients about rogue brokers?

Tell Clients About Rogue Brokers, Ontario Judge Rules

In April 2003 Stuart Weinberg of DOW JONES NEWSWIRES wrote " A recent Ontario court decision found that brokerage firms should warn clients about brokers who engage in improper conduct." He reports that "Ontario Superior Court justice Donald Gordon ruled that Midland Walwyn Capital Inc. and Levesque Securities Inc. were obligated to warn clients about the misconduct of George Georgiou, a former stockbroker who worked at Midland and Levesque between 1988-1995."
He also reported that Justice Gordon wrote in his decision "Despite...knowledge of improper conduct which placed clients at risk, Midland and Levesque made a deliberate decision not to inform their clients and the regulatory bodies".

This is an important decision for investors. Many have suffered losses when the industry has covered up improper conduct and exposed investors to the risk of dealing with bad brokers. Now there is legal precedent.