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.
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