Attorney Jeffrey P. Coleman answers a common question about brokers selling potentially risky products.
There are sometimes products, that do not appear on your account statement that are perfectly legitimate. This is frequently the case with insurance products or variable annuities which may not show up on your account statement. However, if you have other types of investments or questions; investments that aren’t showing up on your account statement, it is possible that that broker was involved in something called, selling away. In other words, he sold you an investment outside of his brokerage firm. There’s a reason why he did that. There’s a reason why that broker dealer will not allow that, potentially risky product, to be sold by their brokers. The broker dealer can still potentially be held responsible for things that are being sold away from their firm, if they had knowledge, or if they negligently did not become aware of their broker selling away from the firm.