Question

Which of the following actions violates FINRA rules regarding selling away?

A. recommending to a customer the services of another broker-dealer (BD)
B. sharing commissions with another registered representative in the same BD
C. advising customers to buy mutual funds at amounts just below a discount level
D. engaging in private securities transactions without written prior consent of the employing BD

Answer 1

Engaging in private securities transactions without written prior consent of the employing broker-dealer violates FINRA rules regarding selling away.

Step-by-step explanation:

The action that violates FINRA rules regarding selling away is engaging in private securities transactions without written prior consent of the employing BD. Selling away refers to when a broker performs transactions outside the purview of the brokerage firm they are affiliated with, without notification or approval. FINRA rules mandate that registered representatives must provide written notice to their employing broker-dealer (BD) and obtain written prior consent for any private securities transactions in which they participate. This rule ensures oversight and the prevention of conflicts of interest or fraudulent activities.