New York, NY securities attorney Jenice L. Malecki talks about aiding and abetting fraud. She frequently pursues aiding-and-abetting cases alongside failure-to-supervise claims against broker-dealers and banks when a Ponzi scheme has been perpetrated, often within a branch office. It is surprisingly common for relatively unsupervised branch offices to be the setting for such schemes.

In these instances, she argues that the firm’s failure to fulfill its supervisory responsibilities under securities and banking laws gives rise to claims for both aiding and abetting and failure to supervise. Some broker-dealers and banks turn a blind eye to known outside business activities, failing to actively monitor them. Regulatory rules require that any outside business activity—particularly if it involves investments—be fully vetted and appropriately supervised as if it were occurring within the firm itself. Cases are brought based on these established legal theories, holding firms accountable for lapses in oversight.