During a compliance drill, focus on how the Uniform Securities Act applies here. Treat the facts as a straight Series 63 application question. 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:

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. This variant keeps the same legal rule but shifts the setup so recall has to stay flexible.