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Series 63: Regulation of Broker-Dealers & Agents
Series 63 practice questionmediumSelling Away

An agent recommends and sells a private real estate investment to a client without the knowledge or approval of his broker-dealer. Under the Uniform Securities Act, this is:

  1. APermissible if the agent is not compensated
  2. BSelling away and strictly prohibited✓ Correct answer
  3. CAllowed if the client is an accredited investor
  4. DNot a securities law violation if the security is exempt
Explanation

Why BSelling away and strictly prohibited

Selling securities (including private placements) outside firm supervision is 'selling away' and prohibited under USA Section 402, regardless of compensation or client status.

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