Shepherd Smith Edwards and Kantas Houston Misrepresentations Lawyers Represents Investors In The Lone Star State in Their Broker Fraud Disputes
If you suffered portfolio losses and suspect that you may have been the victim of misrepresentations or omissions by your broker or investment adviser, contact our Houston securities law firm of Shepherd Smith Edwards and Kantas (investorlawyers.com) today. We have been fighting for Texas investors since 1990.
What Are Misrepresentations and Omissions As They Relate To Broker Fraud?
A misrepresentation is when your financial advisor doesn’t fully or accurately disclose material information to you. An omission is when they neglect to disclose key facts. Misrepresentations and omissions by your broker, whether done deliberately or not, can lead to serious consequences, including portfolio losses.
Here are some examples:
- A broker doesn’t fully disclose all fees involved. You end up blindsided by how much you have to pay them in commissions, as well as other costs you were never fully apprised of.
- Your financial adviser minimizes the risk of loss involved in an illiquid alternative investment. This causes you to think you are about to place your money in a safe, low-risk product that is, in fact, high-risk and volatile.
- Your stockbroker doesn’t explain the risks involving a particular non-traded real estate investment trust (non-traded). Instead, they expect you to read its prospectus, which is hard to understand, given that you are a novice investor.
- A financial advisor guarantees you will make returns on an investment.
- Your broker inaccurately compares borrowing on margin, which is a high-risk strategy, to placing your money in a CD.
- Your stockbroker does not disclose that they have a vested financial interest in an investment they are recommending. This is also a conflict of interest.
A broker who makes misrepresentations and omissions of material facts about a financial product or strategy makes it impossible for the investor to have all of the information they need to make informed decisions.
FINRA Rules related to misrepresentations and omissions:
Rule 2020: Prohibits financial advisors from using fraudulent, deceptive, or manipulative means when selling securities to customers.
Rule 2210: Does not allow the use of forecasts showing specific investment returns.
Rule 2010: Member firms are required to engage in commercial honor and fairness in all business practices.
Rules 2150: Does not allow a broker to make any guarantees against loss, which can be considered a misrepresentation of the risks involved.
Rule 2240: Addresses conflicts of interest that can arise.
The US Securities and Exchange Commission (SEC) also considers misrepresentations and omissions as it relates to the sale or purchase of an investment to be a violation of securities laws and antifraud provisions.
What Should You Do If You Suspect Misrepresentations and Omission by Your Stockbroker?
Contact our Houston, Texas misrepresentation and omissions law firm today. We can determine whether your financial advisor misrepresented, made untrue statements, lied, or failed to disclose material information about your investment. If you reasonably relied on what they said or did not say, and you end up sustaining financial losses because of this, you may have grounds for suing the broker and their firm for damages.
Brokers have a duty to fully disclose all material facts, including the risks. A broker-dealer is required to properly supervise its registered representatives to ensure that fair and accurate communications with their customers occur.
Our Houston securities lawyers, legal consultants, paralegals, and other key team members at Shepherd Smith Edwards and Kantas have a collective more than 100 years of experience in securities law and the securities industry. We have represented Texas investors, other US investors, and foreign nationals regarding more than 1000 matters in arbitration, mediation, and litigation. More than 90% of our clients have secured awards or settlements through our skilled and dedicated efforts.
Contact our Houston Misrepresentations Lawyers Today
Because we work on a contingency basis, you would only pay us for our legal services if we were to obtain your financial recovery. Call (936) 251-0033 or (800) 259-9010 or fill out this online form.
1010 Lamar St #900
Houston, TX 77002