Selling Away And Outside Business Activity: What To Know
Selling away occurs when a broker solicits an investment that his employer has not approved. Under Financial Industry Regulatory Authority (FINRA) Rule 3280, brokers must provide written notice to their firm before participating in any private securities transactions.
Investors usually assume that a firm has vetted every product its representative presents. Unfortunately, there are myriad unscrupulous brokers who engage in misconduct such as selling away and outside business activities.
Brokerage firms have an obligation to perform due diligence and supervise their representatives. If a broker manages to evade oversight, the firm may face liability for failing to protect its clients.
What To Look Out For
Brokers who engage in selling away or outside business activities often try to hide their actions from compliance departments. There are some subtle shifts in how your representative conducts business that may be warning signs. These include:
- Is the recommended investment significantly different from previous conservative recommendations?
- Are communications arriving via personal text or personal email rather than an official business account?
- Does the investment fail to appear on your official monthly brokerage statement?
- Is your broker asking you to lie or cover for him if compliance officers contact you?
Why Work With Richard A. Lewins?
Working with the right lawyer can directly impact your financial recovery. Mr. Lewins brings more than 30 years of legal experience to your side. As a former investment professional and an award-winning attorney, he understands complex financial products from the inside out. He has extensive success pursuing negligent brokerage firms to recover lost funds for wronged clients.
At LewinsLaw, P.C., attorney Richard A. Lewins helps investors hold negligent brokers and brokerage firms accountable and recover losses due to inappropriate conduct. From his Dallas office, he represents clients across Texas and throughout the United States.
If you suspect your broker engaged in unauthorized transactions, contact him immediately. Please call 972-893-9245 or send him an email to schedule a confidential consultation.