Call Now For a Free Consultation:
(614) 532-4576
Nationwide Representation

How Brokers, Advisers, and Other Financial Professionals Mislead Investors

Watch Out! That Seemingly Innocuous Recommendation Could Be Fraudulent

As a July 12 U.S. News Money article recently discussed, the flood of Ponzi schemes and overt investment scams that have been making headlines over the last couple of years has caused some investors to lose sight of a more subtle, but just as costly, type of investment fraud: misrepresentations and omissions.

Despite the latest headlines, most investment fraud cases don’t involve decades-long schemes, bogus account statements, or outright lies. Instead, a large number of investment fraud cases involve brokers, advisers, and other financial professionals who (like the Phoenix-based advisor who allegedly failed to disclose an important conflict of interest before recommending investments to his clients) neglect to disclose material facts or make claims about particular investment products or strategies – despite the fact that those claims may be false or misleading – in order to make a sale.

Common examples of misrepresentations and omissions include

• Mention of “guaranteed” results or returns;• Failure to disclose the commissions and fees associated with a product or investment opportunity;• Inaccuracies in, or overly rosy portrayals of, an investment’s historical performance; and• Unsupported claims about investment strategies or particular products.

While you probably know to be wary of opportunities that seem too good to be true, you may not know how to recognize more subtle forms of fraud. To classify as false, a claim doesn’t have to promise fast or overly large returns.

In fact, most false representations take the form of seemingly innocuous advice, such as the recommendation to invest only in actively managed funds or the recommendation to move retirement savings into a variable annuity.

Stockbrokers, investment advisors, and other financial professionals are required by law to provide you with all of the important and essential information about a potential investment opportunity or securities product before you invest. If they don’t provide you with this information, or if the information they provide you with is false, it could be considered a “misrepresentation” or “omission” on the part of the professional and he or she may be held liable for any losses you incur as a result.

If you believe you have suffered investment losses due to the misconduct of your broker or financial advisor, simply fill out our easy online contact form, or give us a quick call to get a free consultation about your case.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Atlanta Office

945 East Paces Ferry Road, Suite 2275
Atlanta, GA 30326
Columbus Office

305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram