Misrepresentations are oral or written statements made by the broker that are relied on by an investor which later lead to losses by the investor. Misrepresentations can take the form of promises about future performance, price predictions, guarantees, and special knowledge about the performance of a particular financial product. Many times a broker may misrepresent the risk of a particular financial product including stocks, bonds, mutual funds, exchange traded funds (ETF), annuities, and real estate investment trusts (REITS) at the time of its sale to the investor. Likewise a broker may fail to disclose the all of the facts to investor that he would reasonably need to make an investment decision. In either event, a broker has a professional duty to disclose these risks upfront. His or her failure to do so makes him potentially liable to the investor for all losses cause by the misrepresentation.
If you need help settling a dispute with your stock broker, financial advisor or brokerage firm please contact one of our FINRA attorneys at 855.327.7529.