A broker learns that one of their agents made a material misrepresentation to a buyer about the property. What are the broker's obligations?

BROKER RESPONSE TO AGENT MISREPRESENTATION: The broker has both ethical and legal obligations when they discover an agent's misrepresentation: CORRECT THE MISREPRESENTATION: The broker has a duty to ensure the buyer receives accurate information — failing to correct a known misrepresentation is itself a form of concealment; NOTIFY APPROPRIATE PARTIES: The buyer must be informed; depending on circumstances, the transaction may need to be modified or cancelled if the misrepresentation was material and the buyer relied on it; AGENT DISCIPLINE: The broker must address the agent's conduct — depending on severity: counseling; supervision; termination; state reporting (some violations require reporting to the real estate commission); LEGAL EXPOSURE: The broker faces vicarious liability for the agent's misrepresentation — the broker can be sued alongside the agent for actual damages. Ignoring the misrepresentation and hoping it isn't discovered creates maximum liability exposure.