Cover v. Cushing Capital Corp.

WIEAND, Judge:

The issue in this appeal is whether a broker-dealer can be held vicariously liable for the acts of an agent or liable for negligent supervision of an agent who has fraudulently obtained and converted moneys from would-be investors. The trial court, following trial without jury, found that the principal was not liable for fraudulent machinations of the agent which were unknown to the broker-dealer. We affirm.

In 1972, while associated with Investors Security, Carl Fugh met Alice Salzillo. She, in turn, introduced him to Mabel Cover, Richard Woodhall, Kenneth Horrell, and R. Joseph…