If you are a victim of investment misconduct by your stockbroker and come
to learn that he or she may have sold you an investment that was not approved
by the brokerage firm, you may have a claim against the firm for what
is known as selling away.
Selling away is when a broker solicits investors to purchase securities
or investments that are not held, offered, or approved by a brokerage firm.
What would motivate a broker to sell an investment that’s not approved
by the firm? Money. More specifically, commissions. Since the investment
is not on the approved product list, the broker does not have to share
the commission with the brokerage firm.
Unfortunately, most cases of selling away that we see in our office involve
private placements, promissory notes, and other non-public investments
that end up resulting in substantial investment losses. As a general rule,
selling away is a violation of the securities laws and typically, the
outside investment itself, may be fraudulent.
When selling away happens, it may be an indication that the brokerage firm
failed to adequately supervise the broker. Although the firm may claim
to be unaware that one of its brokers is offering unapproved outside investments,
brokerage firms do have a basic duty to properly supervise the actions
of their employees. In the case of selling away, it may be possible to
hold the brokerage firm responsible for the losses sustained by victims
of stockbroker misconduct or fraud if the firm failed to adequately supervise
If you found yourself a victim of selling away, an experienced securities
fraud attorney at Meyer Wilson may be able to help you recover your losses.
You can call us anytime for a free and confidential case evaluation.