New York, NY securities attorney Jenice L. Malecki talks about the liabilities for defective securities. She notes that both the individual broker and the firm can be held liable in cases involving defective securities. However, the firm carries the greatest degree of responsibility, as it is expected to conduct thorough due diligence on the product to ensure it is suitable and in the best interest of clients. A defective security, by definition, is inappropriate for sale to any investor. Liability for the broker is secondary and arises primarily if they should have been aware of the product’s defects.