What is a Misrepresentation or Omission of Material Facts?

Misrepresentations and omissions of material facts concerning investment

recommendations frequently deprive investors from obtaining the information they need to assess the risks associated with a particular investment and make an educated decision.

Fraudulent Investment Misrepresentations or Omissions

FINRA Rule 2020 also known as FINRA’s anti-fraud rule, prohibits brokerage firms and stockbrokers from making material misrepresentations of fact to induce an investor in connection with sale or purchase of an investment. Such conduct is also unethical and is a violation of FINRA Rule 2010. The SEC has also found that a firm or broker who willfully or recklessly misleads an investor in connection with the sale or purchase of an investment violates the antifraud provisions of the securities laws and constitutes a violation of Section 10(b) of the Exchange Act and Rule 10b-5.

You may have an investment fraud arbitration claim against a brokerage firm or its broker if: 

• The brokerage firm or stockbroker intentionally misrepresented or made untrue statements of material facts or omitted to disclose material facts to you regarding an investment.
  
  
• There was a duty to disclose the material facts and the broker omitted to make the proper disclosures needed to make the statements made not misleading.
• You reasonably relied on the misrepresentation and suffered financial losses.
  
  

Most often cases of misrepresentation involve the overpromising of returns on an investment or a failure to disclose the potential risks of an investment opportunity. These decisions to misrepresent or omit an opportunity are in direct violation of a broker’s primary duty to fairly disclose all of the risks associated with an investment. 

If you think that you are a victim of investment fraud, time is of the essence. 

Riera Law is Ready to Help

Riera Law can help you determine whether your investment losses were the result a brokerage firm and/or their stockbroker’s misrepresentation or omission of a material fact. If so, you may be able recover your losses in a FINRA arbitration claim. Contact us or call us today at 305-204-9779 for a free case evaluation.