In the event of a dispute over funds in a trust account, what should a broker do?

In the event of a dispute over funds in a trust account, the appropriate course of action for a broker is to ensure that the funds are managed correctly and in compliance with legal and ethical standards. When disputes arise, releasing funds immediately to avoid conflict can be problematic, as it may not address the rights of all parties involved and could lead to further complications.

Waiting for a written release from all parties is essential because it ensures that there is mutual agreement and understanding about the distribution of the funds before any action is taken. This step protects the broker and helps to prevent accusations of misappropriation.

Additionally, once an action is filed in court, depositing the funds with the court serves as a method of holding the funds securely until the dispute is resolved legally. This protects the interests of all parties and ensures that the funds are released according to the court's determination, thus minimizing the broker's risk of liability.

Therefore, the correct approach is to wait for a written release from all involved and, if necessary, deposit the funds with the court once an action is initiated. This comprehensive method ensures that all legal requirements are met and that the broker acts responsibly in the face of a dispute over trust account funds.