In the United States, if one of your securities gets sold off that you didn't want sold off, and your financial advisor says he's not the one who did it, but it was in fact one of his underlings, is it possible that he's telling the truth?

It seems to me that he would need to have given the order for them to have done it, but if someone could let me know about whether it is possible without him giving the order, and perhaps provide links to something where I could learn more about it, I would be very much appreciative.

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    Whether it was one of his underlings is largely irrelevant; the principle of respondeat superior would likely hold him liable. If he created a situation where someone else could sell a security, then he's negligent. – Acccumulation Jan 24 '18 at 23:43
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    @Acccumulation that should be an Answer (with a short citation as to what "the principle of respondeat superior" means). – RonJohn Jan 25 '18 at 0:12
  • @Acccumulation possibly with some kind of link. – ALannister Jan 25 '18 at 0:31

Generally speaking, from a liability perspective, it doesn't matter whether he did it, or whether an "underling" did it. If he provided someone else with the means to do it, then he's negligent. And according to the principle of respondeat superior, employers are generally liable for the actions of their employees. Of course "underling" isn't a legal term, so there might still be some question of the exact status, but the very fact that this other person was able to act on your financial adviser's behalf, and with respect to your financial adviser's professional role, makes a strong case the respondeat superior applies. Note that this doesn't apply to just any action by an employee; if your neighbor's tree falls on you, you probably won't be able to sue their employer, since that doesn't have anything to do with their job. So you do have to show a nexus between their employment and harm to you, but that nexus certainly does appear to exist.

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