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What is “Selling Away,” and How Can I Avoid It?

Simms Law, P.C. June 14, 2022

Selling away occurs when a financial advisor sells securities not held or offered by his or her brokerage firm. Specifically, this term describes the situation in which a transaction is not approved for sale by a financial advisor’s firm and isn’t included on the firm’s approved product list. Selling away is an unethical practice and can lead to investors losing large sums of money. If you believe you are a victim of this practice, you should immediately contact an experienced Florida investor representation attorney. In addition, please review the information below for tips on avoiding this practice in the future.

Avoiding Selling Away

In order to avoid this practice, we recommend the following:

  1. Do your research. Before trusting a financial professional with your money, do some research. There are several websites available that allow investors to check the backgrounds of financial advisors. Financial professionals with questionable backgrounds should be avoided.

  2. Avoid outside investments. After you’ve chosen a financial advisor to work with, avoid investing in anything that your financial advisor recommends that is outside of the brokerage firm. In other words, if your advisor requests that you bypass the official investment process of his or her firm, you should be very suspicious.

  3. Take action. If you discover that you’ve invested in a security that your advisor sold away from his or her firm, immediately contact an experienced investor representation attorney for advice on how to take legal action to reverse the transaction.

  4. Contact an investor representation attorney. If you have already lost money due to the practice of selling away, immediately contact an investor representation attorney to help you pursue legal action against the firm. Investment firms are required to supervise their financial advisors, and when an advisor participates in the practice of selling away, his or her investment firm may be found liable for failing to carry out its supervisory obligations.

Fort Lauderdale Investor Representation Attorney

At Simms Law, P.A., one of our primary focuses is the representation of investors—including those investors who believe they’ve been the victims of financial fraud. Unfortunately, securities fraud has been a part of the United States financial system since the advent of the stock market. For the retail investor, securities fraud typically occurs when a broker or financial advisor misrepresents the risks and key characteristics of an investment, causing the investor to purchase an unsuitable security. At Simms Law, we always take our clients’ concerns seriously and are aware of what is at stake when an investor suffers losses due to financial fraud. If you are a victim of selling away or suspect that any suspicious activity has occurred in any of your investment accounts, please contact us as soon as possible for a free consultation with our experienced Florida investor representation attorney.