Stock exchange held liable for inadequate supervision of stockbroker

The Amsterdam court has found the Amsterdam Stock Exchange Association (the Association), the legal predecessor of Amsterdam Exchanges (AEX), liable for losses suffered by Van den Broek, a Dutch stockbroker, following the 1993 bankruptcy of Nusse Brink, another Dutch stockbroker. The court held that the Association`s control department was not sufficiently ‘alert’ to be aware of the extent of Nusse Brink`s financial distress. The Amsterdam court held that, by neglecting its core responsibilities in this way, the Association had been at fault and had acted rashly. The Nusse Brink affair is one of principal reasons why the supervision of Dutch stockbrokers has been transferred (to a large extent) to the Dutch Securities Board. The verdict suggests that other supervisory authorities could also be held liable for supervisory failures.