Misrepresentation and Omission

Misrepresentation and Omission of Facts

At the Investment Loss Recovery Group, we know how misrepresentation and omission of facts can harm your investments. When a broker or investment advisor distorts or omits the facts, they’re engaging in unethical and illegal activity that violates the duties they owe to their clients. When an investor acts on an incomplete or false picture of an investment, they may risk losing years of hard work and the money they need for the future.

As former licensed securities brokers, we know the legal and ethical regulations that govern the investment industry. We understand how misrepresentations and omissions can harm investors and their families. When a broker or advisor twists facts or leaves them out of discussions, they’re risking your wellbeing and your hard-earned money.

The experienced lawyers at the Investment Loss Recovery Group know how to fight for you and your investments. We gained insight into how brokers and their firms defend these claims during our time as defense attorneys for large Wall Street broker dealers. That experience allows us to anticipate and counter their arguments.

If you believe your investments have been harmed by misrepresentations or omissions, we want to help you recover. Contact us today for a free consultation. We will review your circumstances and advise you about your best legal options.

Misrepresentation and Omission

Misrepresentation and omission are ways that unscrupulous financial advisors intentionally or negligently deceive clients. It’s unethical and illegal behavior that can lead to serious problems for firms and brokers. It can cause huge losses and problems for investors.

Misrepresentation is when an advisor twists the facts ? or lies ? about an investment. It’s a breach of trust and a breach of a broker’s professional duties.

Brokers misrepresent facts about an investment for many reasons. Sometimes it’s due to negligence where a broker has not met their legal obligations to research an investment opportunity. In some cases, misrepresentation rises to the level of fraud when brokers knowingly and intentionally misstate facts to benefit themselves.

  • Negligence is when a broker fails to meet their professional duties and obligations to provide investors with sound advice. This can happen because the broker was lax in their duties or because a firm failed to oversee the fact-gathering process. When a brokers negligence causes misrepresentations, investors rely on flawed information to make very important decisions.
  • Intentional misrepresentation is a type of fraud that takes place when a financial advisor intentionally or knowingly misrepresents the facts about an investment. The broker may have a hidden incentive that the investor doesn’t know about. In these cases, the broker is using misrepresentation to guide an investor’s money toward something the investor likely would not want if the true facts were known. It’s criminal behavior that clients can recover for.

Omission is when a financial advisor leaves facts and other important information out of discussions about an investment. The advisor may omit important facts such as fees hidden in an investment or other material facts that would impact the investor’s decision to invest. Brokers and other investment professionals have a duty to give their clients the relevant facts about an investment.

Again, omissions of facts may be due to negligence or they may be due to intentional fraud. In either case, the investor may be harmed and may be able to recover their losses.

Examples of misrepresentation and omission include:

  • Inflation of the investment’s projected performance
  • Failure to inform a client about fees and hidden costs in an investment
  • Failure to disclose important risks about an investment

It’s important to remember that misrepresentation and omission are often types of fraud. They both involve a broker or investment advisor’s distortion of key facts, often for the broker or advisor’s own benefit. Brokers and financial advisors are in positions of trust. When they abuse that trust for their own purposes, they may have engaged in investment fraud.

If you’ve been hurt by the misrepresentations or omissions of an investment advisor, make sure you get the help you need to hold the responsible parties accountable.

How to Recognize Misrepresentation or Omissions

Misrepresentation or omissions usually aren’t obvious right away. It often takes time for the investment to fail or for hidden fees to activate. Be sure to watch your investments and monitor their development.

If you’re unsure about the advice of an investment advisor, the following could be signs of fraud:

  • Hidden fees appear on your investment statements.
  • Risks and returns don’t match what your advisor promised.
  • You’re sent investment documents that don’t line up with your advisor’s promises.



  • Losses are far higher than expected.
  • You hear about fraud in your investment from media or other investors.


What to Do If You Suspect Misrepresentations or Omissions

If you suspect misrepresentations or omissions in your investment information, you should act quickly to protect your investments. The faster you can gather your materials, the more time investigators and authorities will have to review the facts of the case.

If you suspect misrepresentations or omissions regarding your investments, the following tips can help:

  • Gather any communications or correspondence about the investment.
  • Gather any other documents related to the investment such as statements, bills, and others.
  • Contact a lawyer. A lawyer can help review your case and help you plan your strategy for recovery.
  • If you suspect fraud, contact regulators such as FINRA and the SEC. They can begin an investigation.

Misrepresentations and Omissions Are Violations of Trust

We count on brokers and investment advisors for trustworthy advice. We trust that they will review all investments and provide us with accurate and helpful advice. But sometimes, due to fraud or negligence, our advisors fail us.

The Investment Loss Recovery Group has handled misrepresentation and omission cases of all types. As attorneys and former licensed securities brokers, we understand the duties that you’re owed as an investor. Whether your broker made mistakes or intentionally deceived you, we know how to investigate and recover for you. We have recovered millions of dollars on behalf of our clients from some of the largest firms on Wall Street.

Misrepresentation and omission are serious problems that can cost you everything. If you’ve relied upon the faulty statements of a broker or investment advisor and suffered as a result, you need legal help to pursue compensation for your losses. Contact us today for a free consultation.

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