Series 63 practice questionmediumProhibited Practices — Selling Away
Agent Mike sells interests in a private real estate fund to his brokerage clients without informing his employing broker-dealer. This practice is known as:
- AFrontrunning
- BInsider trading
- CSelling away✓ Correct answer
- DBest execution
Explanation
Why C — Selling away
Selling away occurs when a registered agent conducts securities transactions outside the scope of his employment with his broker-dealer, without the firm's knowledge or approval. Under NASAA model rules and USA Section 502, this is a prohibited practice because the broker-dealer cannot supervise the transaction or protect the customer.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 646+ Series 63 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Regulation of Broker-Dealers & Agents questions
- Under what circumstances may an agent share in the profits or losses of a customer's account?
- An agent executes a trade in a customer's account without the customer's prior knowledge or authorization and without…
- An agent borrows $5,000 from a customer to pay personal expenses. Under the USA, this practice is:
- An agent executes 47 trades in a customer's account during a single month, generating substantial commissions while the…