Cases of “selling away” by investment brokers are on the rise. Selling away is the illegal practice of a stock broker soliciting the sale of securities that are not offered or authorized by the broker-dealer firm. Solicitations by the rogue broker may include a number of investment vehicles, unusually offering higher returns than traditional securities. These risky investments are usually unregulated, providing an ideal environment for securities fraud such as ponzi schemes. Selling away is more common with franchisee brokerages, which often have smaller offices and no branch manager. The lack of oversight is difficult to regulate for the parent firms.
Two separate cases recently in the news included brokers who at one time were affiliated with Edward Jones and Raymond James Financial Services Inc. In the Edward Jones case, two brokers in South Dakota sold clients investments originated by a company called Gibraltar Partners, Inc. It turns out the investment was an alleged ponzi scheme. Edward Jones fired both brokers and Gibraltar Partners is being sued in New York, US district court for $100 million dollars in damages.
In Massachusetts, Thomas Keough, a broker who used to be affiliated with Raymond James Financial was charged by the Securities and Exchange Commission for selling unregistered promissory notes for a subprime auto lender. Keough generated about $110 million in the scheme.
To avoid being victimized by a rogue broker using “selling away” tactics, ask for documentation on all investment options. Information and financial data should be available for all authorized investments offered by brokerage and investment firms. Check your potential brokers record by performing a background check (FINRA-Brokercheck www.finra.org), and never trust an investment promising astronomical returns. If it sounds too good to be true, it’s not true! If you feel that you have been a victim of “selling away” tactics please call the Anton Legal Group to discuss your rights. S. David Anton is Certified Securities Arbitrator and an experienced Securities Litigation Attorney who will fight to recoup your losses and protect your rights.
S. David Anton is a member of Public Investors Arbitration Bar Association (PIABA) the preeminent national wide organization of attorneys who represent brokerage firm customers in disputes with the industry. He is also a Certified Securities Arbitrator with the Financial Industry Regulatory Authority (FINRA), formerly NASD and resolves disputes between investors and stockbrokers, investment advisors and their firms. He has been practicing law since 1985 and representing brokerage firm customers since 1999. He is a Tampa, Florida based attorney who can handle securities arbitrations anywhere in the U.S.
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