Selling Away

Selling Away: Recovering Losses from Unauthorized Private Securities Transactions

Holding Brokers Accountable for Unauthorized Private Securities Sales

At Iorio Law PLLC, we represent investors nationwide who have suffered financial losses due to a broker’s unauthorized sale of securities—commonly referred to as “selling away.” When financial advisors solicit investments not approved by their firms, investors are exposed to heightened risk and minimal supervision. These unlawful transactions often involve complex, high-commission products and frequently result in devastating losses.

Led by nationally recognized securities arbitration attorney August M. Iorio, our firm has successfully recovered nearly $100 million for investors in more than 700 cases. If you believe your broker sold you an unapproved or off-book investment, contact us for a free consultation. We are based in New York and represent clients across the United States.

What Is Selling Away?

“Selling away” refers to when a broker or financial advisor recommends or facilitates the sale of a security or promissory note that is not offered or approved by the brokerage firm where they are registered. These transactions occur “away” from the firm, outside the normal compliance and supervisory structures meant to protect investors.

Under FINRA Rule 3280, registered stockbrokers must provide written notice to their firm before engaging in any private securities transaction, and the firm must approve it. A “private securities transaction” is defined as any securities deal outside the regular scope of the advisor’s employment with the brokerage firm.

Brokers are generally limited to promoting and selling only firm-approved investments. However, advisors often bypass this by pushing unapproved products to chase higher commissions or avoid firm oversight. This leaves investors exposed to undue risks without the protections of proper supervision.

Selling away is also known as:

• Private securities transactions
• Undisclosed outside business activities
• Off-the-book investments

Why Selling Away Is Dangerous for Investors

Selling away is problematic because it circumvents the regulatory safeguards designed to protect investors. Financial advisors may engage in this misconduct to earn hefty commissions they don’t have to share with their firm or to evade compliance scrutiny that could flag risky or fraudulent deals.

Brokerage firms have a duty to supervise their advisors and client accounts to ensure adherence to securities laws, FINRA rules, and industry standards. When a transaction happens “away” from the firm, this supervision is absent, increasing the likelihood of fraud, misrepresentation, or unsuitable recommendations. Investors often end up with high-risk, illiquid, or outright fraudulent investments, leading to significant losses. Without firm oversight, red flags like Ponzi schemes or overpromising returns go unchecked, leaving you—the investor—bearing the brunt of the harm.

When a broker operates outside of their firm’s compliance framework:

• The investment may not be vetted for suitability, risk, or fraud.
• Investors lose the benefit of firm oversight and due diligence.
• There is often no insurance, supervision, or audit trail.
• The investor may be misled into believing the investment is safe or firm-approved.

These transactions are often motivated by a broker’s desire to collect undisclosed commissions or participate in schemes that would never pass firm-level review.

Examples of Selling Away

Not all unapproved investments are obviously suspicious, but many share common characteristics. Selling away often involves:

• Private Placements and Promissory Notes: Advisors might pitch unregulated private placements in startups or small businesses, promising high returns but omitting risks like illiquidity or total loss. These are often sold to generate big commissions without firm approval.
• Ponzi Schemes and Fraudulent Investments: A notorious case involved Future Income Payments, LLC, marketed as a “pension stream” investment with guaranteed high yields. Brokers across the country sold this to clients despite it not being firm-approved, only for it to be exposed as a Ponzi scheme, leaving investors with massive losses.
• Oil & Gas Interests or Real Estate Deals: Advisors may solicit investments in unapproved energy ventures or property syndications, which carry high volatility and are unsuitable for conservative portfolios.
• Pre-IPO Shares or Offshore Securities: These complex products, like shares in emerging companies or foreign investments, are frequently sold away to avoid firm due diligence, exposing investors to scams or market manipulation.
• Insurance Trusts or Corporate Debentures: An advisor at a bond-focused firm might push unapproved mutual funds or trusts, diverging from the firm’s scope and your risk tolerance.
• Offshore investments or insurance products: Including unregulated securities or foreign ventures with little to no transparency.

If your advisor solicited you to invest in a deal “outside of the firm” or discouraged you from discussing the investment with the brokerage, it may be a case of selling away.

The Brokerage Firm’s Responsibility to Supervise

Brokerage firms aren’t off the hook just because a transaction was “away” from their oversight. Under FINRA rules, firms must establish robust systems to monitor advisors’ activities, including detecting and preventing private securities transactions. Failure to do so may result in liability for investment losses.

If a firm approves a private transaction (per FINRA Rule 3280), it assumes full legal responsibility, no exceptions. Even without approval, firms can be liable if:

• The advisor acted with “apparent authority,” meaning you reasonably believed the investment was firm-sanctioned.
• The firm failed to supervise adequately, ignoring red flags like unusual account activity or advisor disclosures.

At Iorio Law PLLC, we’ve successfully argued these points in FINRA arbitration cases, holding firms accountable for negligence in supervision.

Signs You May Have a Selling Away Claim

Investors often don’t realize they’ve been sold away from until after suffering losses. You may have a claim if:

• You invested in a promissory note or other direct investment in a start-up or new business venture.
• The investment was not reflected in your official account statements.
• The advisor communicated with you through unsupervised channels, such as private email accounts or text messages.
• You invested in a product that the brokerage firm never disclosed or endorsed.
• The advisor asked you to write a check to an entity other than the brokerage.
• You were pressured into a complex or obscure product with high promised returns.
• The investment was marketed as “safe,” “guaranteed,” or “approved,” but turned out otherwise.

Our firm investigates the full context of the transaction, including email communications, outside business activity disclosures, and supervisory practices, to determine whether your advisor acted outside the firm’s authority and whether the firm failed to properly supervise.

Recovering Selling Away Losses Through Securities Arbitration

If you lost money due to selling away, you may be entitled to compensation. Most cases are resolved through FINRA arbitration, the dispute resolution forum used by brokerage firms and registered brokers. At Iorio Law PLLC, we handle all aspects of the arbitration process:

✅ Case evaluation and document review
✅ Claim drafting and filing with FINRA
✅ Arbitrator selection and discovery
✅ Settlement negotiation or full arbitration hearing

We work on a contingency fee basis—you pay no legal fees unless we recover money for you.

Why Choose Iorio Law PLLC?

• Exclusive Investor Representation: We represent only investors—never brokers or brokerage firms.
• Track Record of Success: Nearly $100 million recovered nationwide, including millions in unauthorized product sales.
• Recognized Leadership: Attorney August M. Iorio is a Board Director at the Public Investors Advocate Bar Association (PIABA).
• Personalized Advocacy: We tailor our strategy to your unique financial circumstances and legal goals.
• No Upfront Legal Fees: Our interests are aligned with yours—we only get paid if you win.

Contact Iorio Law PLLC Today

If you believe you’ve suffered losses due to an investment that was sold “off the books” or without proper disclosure, do not wait. Selling away claims are subject to time limits, and prompt action improves your chances of recovery.

☎ Call: (646) 330-4624 | ✉ Email: info@iorio.law | : Online Submission: Contact Form

📍Location: One World Trade Center, 85th Floor, New York, NY 10007 | Serving Investors Nationwide

At Iorio Law PLLC, we are more than your legal counsel—we are your dedicated investor advocates. Let us help you hold wrongdoers accountable and recover your lost investments.

Frequently Asked Questions (FAQs) About Selling Away

Q: How do I know if my investment involves selling away?
A: If your advisor recommended a product not listed on your firm statements or outside their typical offerings, it could be selling away. We can review your documents to confirm.

Q: Can I recover losses even if the firm didn’t approve the transaction?
A: Yes, if the firm failed to supervise or you reasonably believed it was approved. Our team has secured recoveries in such scenarios.

Q: What damages can I seek in a selling away claim?
A: Typically, compensatory damages for losses. Other remedies may include interest, attorney’s fees, and costs.

Q: How long does FINRA arbitration take for selling away cases?
A: Most resolve in 12-18 months, faster than court. We guide you through every step.

Let Iorio Law PLLC be your advocate in the fight against selling away. Your recovery starts with a conversation—reach out today.