What should a firm do if it suspects a violation of MSRB rules?

• A. Establish a compliance investigation, report to proper authorities if required, and take remedial action.
• B. Ignore the allegation and continue business as usual.
• C. Publicly accuse the person without internal review.
• D. Increase marketing efforts to offset.

Answer: (A)

When a firm suspects a violation of MSRB rules, the proper path is to treat it as a compliance matter: initiate a formal internal investigation, gather and preserve the relevant facts, and determine whether a rule may have been violated. If the investigation indicates a potential breach, report to the proper authorities or regulators as required by law and MSRB rules, and implement remedial actions to correct the issue and prevent recurrence. This approach protects clients, supports market integrity, and meets supervisory obligations. Ignoring the allegation, publicly accusing someone without review, or trying to “offset” the issue with marketing do not address the potential violation and can create greater risk for the firm.