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Securities, Options and Futures Consultants

STOCK ISSUES

Selling Away ...

Selling away is defined as a broker’s solicitation or making of purchases of stocks or other investments for a customer that are not offered by his brokerage firm or held in the customer's account. These often involve private placements of loans or other non-public investments such as real estate partnerships. The practice is prohibited by both securities regulations and brokerage firm rules, the latter in part because such sales generate no revenue for the firm.

The fact that a brokerage firm is unaware that selling away has taken place does not, in and of itself, relieve the firm of responsibility for the broker’s inappropriate actions and may in fact support a finding of lack of supervision.