The plaintiffs invested in worthless start-up companies on the advice of their financial advisor, who was registered to sell mutual funds through the appellant dealer.
The advisor promoted these off-the-books investments openly from his office.
The trial judge found the dealer liable in negligence for failing to supervise the advisor and vicariously liable for his actions, concluding he was an employee rather than an independent contractor.
The Court of Appeal dismissed the dealer's appeal, upholding the findings that the dealer breached its duty to supervise its mutual fund sales agent and was vicariously liable for his wrongdoing.
