Series 65: Selling Away

Selling Away

When an agent attempts to sell securities that are not sold through an agent’s firm, unless given permission by the firm, this is an ethical violation known as “selling away.”

To avoid selling away violations, agents need to be extra cautious engaging in any outside business activities, especially private placements of investor funds that could be viewed as selling away. The best way to avoid this violation is to properly notify one’s broker-dealer or investment adviser of all outside business and investment activities.

• • Example: Three years ago, Felipe, a professional broker, purchased a partnership in an oil and gas DPP. Since limited partners are purely passive investors who have no role in a DPP’s business operations, Felipe was not required to report this investment to his brokerage as an outside b