Selling Away Claims Under Investigation
When a financial adviser sells an investment to a client that has not been investigated and approved for sale by his brokerage firm, it is called “selling away” in the financial services industry. Financial advisers and stock brokers who engage in selling away are effectively paid a commission under the table, since their stock broker firm is not aware of the sale. Selling away is illegal, and the investor is normally entitled to get their money back from the adviser and/or his brokerage firm.
Banks Law represents investors in selling away cases in FINRA arbitration, which is where these claims are normally resolved. Selling away claims often involve securities fraud, because the investors are not told about the level of risk involved in the investment, and because the financial adviser never tells the investor that the product has not been approved for sale. Oftentimes, these investments are not registered with the SEC, which can be another violation. They are often sold as promissory notes or LLC interests, or tenant in common (TIC) investments. One warning sign that you might have been a selling away victim is if your financial adviser or stock broker sold you an investment that does not appear on your brokerage account statements. There are some approved investments that do not appear on your regular monthly or quarterly statement from your brokerage firm, but not many.
Banks Law is currently investigating a number of selling away violations. Our earlier blog mentioned investments in Uptown Development and Charlie Plan. We can now add Bedrocks Coffee, LLC, to that list. All of these companies are based in Oregon. All investments were sold by an Oregon financial adviser without the approval of his firm. We have been contacted by several parties who have asked for representation and information about these investments, which were sold by a financial adviser in Eugene, Oregon. If you invested in these companies and have questions, please contact us.