Indemnification and Contribution of Customer Claims

Brokerage firms have been known to bring claims against an employee for customer losses even if the firm’s own actions contributed to the setback. Brokers have been blamed for their employer’s improper actions, such as failure to supervise a customer account or urging the customer to purchase securities that resulted in a loss. If the brokerage ends up paying monetary damages or settlements to a customer, it may request a FINRA arbitration to make the broker partially or completely reimburse it for any compensation paid.