What does it generally mean for a broker to face discipline for 'failure to supervise'?

Failure to supervise is a distinct basis for discipline that targets the broker's oversight role rather than direct participation in wrongdoing. If an affiliated licensee commits a violation and the broker lacked reasonable systems to oversee transactions, trust funds, advertising, or disclosures, the broker can be disciplined for failing to supervise even without personally committing the underlying act. This holds brokers accountable for the gatekeeping function the license law assigns them. To guard against it, brokers maintain written policies, review files and trust accounts, and train and monitor agents. The state broker portion frequently tests this concept because it defines the broker's heightened responsibility.