Practice Area

Selling Away

Name: Altamirano PLLC
Address: 285 Fulton Street, New York, New York, 10007
Telephone: (212) 220-6556
Price range: Free consultation

"Selling away” occurs when a broker sells investments not approved or vetted by their firm. FINRA strictly prohibits this practice because it bypasses due diligence and exposes investors to unvetted, risky investments. We aggressively pursue claims against brokers who engage in selling away to hold them accountable and help investors recover their losses.

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What Is Selling Away?

“Selling away” refers to situations where a broker recommends or sells a security outside the scope of their firm’s supervision. These unauthorized securities transactions can include:

Promissory notes
Private placements or hedge funds
Real estate investment schemes
Startup equity or convertible notes
Cryptocurrency offerings

These investments may not be inherently fraudulent, but when brokers push them without firm oversight, it often signals a serious breach of duty.

FINRA Rules That Prohibit Selling Away

Under FINRA Rule 3280, a broker must provide written notice to their firm before engaging in any private securities transaction. This notice must describe:

The transaction in detail
The broker’s proposed role
Whether they expect to receive compensation

If the firm disapproves the activity, the broker is prohibited from participating. Engaging anyway is a violation of Rule 3280.

Importantly, for purposes of investor recovery, this type of misconduct often violates FINRA Rule 2010. Rule 2010 requires brokers to observe high standards of commercial honor and just and equitable principles of trade, a standard that is breached when brokers deceive clients, fail to disclose material facts, or engage in off-the-books activity.

Risks of Selling Away and Investor Harm

When a firm doesn’t approve or supervise an investment, it doesn’t conduct due diligence or risk review. That means:

The product may be riskier or fraudulent
The broker may be motivated by undisclosed commissions
The firm can later claim it didn’t know, putting the burden on you

Selling away undermines transparency and trust. FINRA takes these violations seriously, and so do we.

Selling away often goes hand-in-hand with unsuitable recommendations. If the investment didn’t match your risk tolerance, time horizon, or financial goals, you may have multiple claims.

Examples of Selling Away

Real Example: Promissory Note Fraud

An investor was persuaded by their broker to invest in a high-interest promissory note offered by a “friend’s company.” The broker promised a guaranteed return, but failed to disclose that the firm had not approved the transaction. Months later, the company defaulted, and the investor lost everything.

We help investors recover losses in FINRA arbitration by holding firms accountable for failing to supervise rogue brokers.

Real Example: Private Placement Outside Firm Oversight

A retiree invested in a private placement after their advisor claimed it was “exclusive” and “vetted.” In reality, the investment had not been approved by the firm, and the broker failed to disclose the speculative nature of the deal. The investment ultimately failed, leaving the client with significant losses.

Selling away was at the heart of the misconduct.

Real Example: Broker Pushes Delisted Stock Behind Firm’s Back

An investor was introduced by their broker to a company offering stock that had not been approved by the broker’s firm. The broker failed to disclose his involvement, falsely certified in annual compliance forms that he hadn’t participated in any private securities transactions, and reassured the investor even after the stock was suspended from trading. The investor never saw a return and the company’s registration was ultimately revoked by the SEC.

This kind of misconduct, characterized by deception, evasion of firm policies, and failure to disclose material facts, is a textbook example of selling away.

Signs of Selling Away: What Investors Should Watch For

Selling away schemes often share common warning signs. Be alert if:

Your broker asks you to write a check to a third party
The investment paperwork is not from your brokerage firm
You’re told the opportunity is “off the books” or “exclusive”
There’s pressure to act quickly or keep things confidential
The investment promises guaranteed or unusually high returns

If you’ve seen any of these red flags, it’s time to contact a FINRA arbitration lawyer at Altamirano PLLC in New York.

Can I Recover My Losses From Selling Away?

Yes. Even if the investment wasn’t approved by the brokerage firm, you may still have a claim. Many firms have a duty to supervise their representatives and may be liable for failing to catch or stop the misconduct. Through FINRA arbitration, you may be able to recover losses, especially if the investment was unsuitable or you were misled.

Selling Away and Unsuitable Investments: How They Overlap

Selling away often goes hand-in-hand with unsuitable recommendations. If the investment didn’t match your risk tolerance, time horizon, or financial goals, you may have multiple claims.

How Altamirano PLLC Helps Investors

Jorge Altamirano is a FINRA arbitration lawyer based in New York who represents investors nationwide. If your advisor sold you an unapproved investment, we can help you:

Investigate whether the product was properly disclosed and approved
Determine whether your advisor violated FINRA rules
File a claim through FINRA arbitration
Recover your investment losses

We bring experience, strategic thinking, and relentless advocacy to every case.

Frequently Asked Questions About Selling Away

What should I do if I suspect selling away?

Request documentation showing whether the investment was firm-approved. Then contact a securities attorney at Altamirano PLLC to investigate whether your advisor’s actions violated FINRA Rule 2010.

Can a firm be held liable even if it didn’t approve the investment?

Yes. If the firm failed to supervise the broker or ignored red flags, it may be responsible.

How is selling away different from fraud?

They’re not mutually exclusive. Selling away can be negligent, reckless, or outright fraudulent, but it always involves acting outside firm approval.

What is a FINRA Rule 3280 violation?

A broker violates Rule 3280 when they participate in a private securities transaction without first giving written notice to their firm and receiving approval. While Rule 3280 addresses a broker’s duties to their firm, the misconduct may also support an investor claim under FINRA Rule 2010 if the conduct involved deception, omissions, or other unethical behavior.

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Contact Altamirano PLLC in New York Today

If you’ve lost money due to a broker’s off-the-books investment, Altamirano PLLC is here to help. We offer free consultations and don’t get paid unless you recover.

Contact Jorge Altamirano, Principal of Altamirano PLLC:
One World Trade Center, 85th Floor
New York, NY 10007
(212) 220-6556
[email protected]

Call now or fill out the form below to get started. Securities claims are time-sensitive.

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Tom Schuler
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"Jorge secured a result in our case that felt like a true victory. That, of course, is vitally important. But what is equally noteworthy is how Jorge confidently led us through the process. No question to Jorge was too trivial. From the beginning he explained the process, the challenges, and the risks. I was never under-informed."
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“Working with attorney Jorge Altamirano made this process smooth, easy and comfortable for me as a client. He was diligent, very professional, respectful and a gentleman. I always felt that I was in very good hands and that Mr. Altamirano spared no effort in defending my interests.”
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“I reached out to Jorge Altamirano after reading about his successful case for a client that was affected by trading restrictions on certain stocks. I was impressed that Jorge was able to attain success when every other attorney did not. Jorge explained every step of the way clearly, was extremely thorough, and made decisions with meaningful intent. Not only is he great at what he does but he is also a good person, which I truly appreciated. At the end of the day, he secured a winning outcome for me as well. I couldn’t have asked for more from Jorge and his team. If you are considering Jorge Altamirano to represent you, you are already on the path to victory.”
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