Kentucky License Law
A Kentucky principal broker is responsible for trust account compliance. If a sales associate misappropriates trust funds, KREC may take action against:
AOnly the sales associate who misappropriated the funds
BThe sales associate and potentially the principal broker for supervisory failures✓ Correct
CThe brokerage company's corporate officers only
DOnly the victims of the misappropriation
Explanation
Principal brokers have supervisory responsibility over their associates. If trust fund misappropriation occurs due to inadequate supervision, KREC may take disciplinary action against both the associate who committed the act and the broker for failure to supervise.
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