Practice Area · Broker Fraud

Securities Misrepresentation Attorney

Your broker had a legal duty to tell you the truth, the whole truth, and nothing that would mislead you. When they did not, you may be entitled to recover every dollar you lost.

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What Happened

You Made a Decision Based on Information That Was Wrong, Incomplete, or Deliberately Misleading.

Securities fraud cases often begin the same way: an investor is told something that turns out not to be true, or is not told something they needed to know before making an investment decision. The investment underperforms, loses value, or collapses entirely. Only later does the investor learn that the picture they were given was incomplete, distorted, or false.

This is not a misunderstanding. It is a legal violation. Federal securities law and FINRA rules impose affirmative obligations on brokers and investment professionals to make truthful, complete disclosures when recommending investments. The violation of those obligations, whether through an outright false statement or a deliberate omission of information a reasonable investor would want to know, gives rise to a claim for full recovery of losses.

The omission rule: Under Section 10(b) of the Securities Exchange Act and Rule 10b-5, it is unlawful to omit a material fact when that omission makes a statement already made misleading. Your broker does not have to lie outright to commit securities fraud. Leaving out critical information is enough.

Common Examples

What Misrepresentation and Omission Look Like in Practice

Risk Misrepresentation

A broker describes a speculative investment as "safe," "conservative," or "principal-protected" without disclosing that the product carries significant risk of loss or is illiquid.

Return Guarantees

A broker promises or implies guaranteed returns, fixed yields, or specific income streams without disclosing that returns are variable, projected only, or dependent on conditions that may not materialize.

Omission of Fees and Commissions

A broker recommends a product without disclosing the commission they will earn, the surrender charges the investor will face, or the ongoing fees embedded in the product structure.

Concealed Conflicts of Interest

A broker fails to disclose that the recommended product pays them or their firm higher compensation than alternatives, that they have a financial relationship with the issuer, or that the firm has a proprietary interest in the product being sold.

False Issuer Information

A broker makes materially false statements about the financial condition, track record, management, or regulatory history of the company or fund in which the investor is being asked to invest.

Omission of Regulatory History

A broker fails to disclose their own disciplinary history, prior customer complaints, or regulatory sanctions that a reasonable investor would consider material to the decision to entrust them with their assets.

The Legal Standard

What You Must Show to Win a Misrepresentation or Omission Claim

Misrepresentation and omission claims in FINRA arbitration and in federal court are analyzed under well-established legal standards. The elements required to establish a claim are:

A material misstatement or omission: The false statement or omitted fact must be material, meaning a reasonable investor would consider it important in making an investment decision. Courts apply an objective standard: not whether this particular investor cared, but whether a typical reasonable investor would.
Made in connection with the purchase or sale of a security: The misstatement or omission must relate to a securities transaction. This element is broadly construed and typically satisfied when a broker makes representations in the course of recommending an investment.
Scienter: For federal securities fraud claims under Rule 10b-5, the broker must have acted with scienter, meaning intentional misconduct or reckless disregard for the truth. FINRA arbitration claims may be based on negligent misrepresentation, which does not require proof of intent.
Reliance: The investor must have relied on the misrepresentation or omission in making their investment decision. In omission cases, reliance is typically presumed under the fraud-on-the-market theory or the Affiliated Ute presumption.
Causation and damages: The misrepresentation or omission must have caused the investor's loss. Damages are measured as the difference between what the investor paid and the actual value of what they received, plus any consequential losses.

Why Jorge Riera

A Former SEC Enforcement Attorney Who Prosecuted Securities Fraud

Misrepresentation and omission cases require proving what your broker knew, when they knew it, and what they chose to tell you or withhold. That analysis is most effectively conducted by an attorney who has spent years doing exactly that work from inside the SEC's Division of Enforcement.

Jorge L. Riera spent a decade as Senior Enforcement Counsel at the SEC's Miami Regional Office, building securities fraud cases against brokers and firms who made false and misleading statements to investors. He knows what documents to request, what questions to ask, and where the evidence of intentional misrepresentation is most likely to be found.

CPA Advantage in Fraud Cases

Quantifying damages in misrepresentation cases requires calculating the difference between what the investor paid and the true value of what they received, accounting for market movements, fees, and alternative investment returns. Jorge's CPA credentials allow for faster case evaluation, better expert direction, and stronger cross-examination of the firm's damages expert at hearing.

FINRA NAMC Appointment

As one of only 7 Public Members of FINRA's National Arbitration and Mediation Committee, appointed by the FINRA Board of Governors, Jorge brings institutional knowledge of FINRA's arbitration system that directly benefits clients in contested misrepresentation and fraud claims.

All misrepresentation and omission claims are handled on a contingency fee basis. No legal fee unless we recover.

Case costs and expenses are payable from any recovery as provided in the written engagement agreement.

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Common Questions

Misrepresentation Claims: Frequently Asked Questions

Not necessarily. The critical question is whether the projection was presented in a way that a reasonable investor would understand as a reliable prediction rather than a speculative estimate, and whether the broker disclosed the assumptions and risks underlying the projection. A broker who frames a highly speculative return as a reasonable expectation without adequate risk disclosure has made a misleading statement regardless of whether the word "guarantee" was used.

Generally no. Boilerplate risk disclosure documents do not absolve a broker of liability for specific misrepresentations made in the course of recommending an investment. If your broker told you verbally that an investment was safe while the written documents described it as risky, the verbal misrepresentation may be actionable regardless of what you signed. The key is what the broker actually said and what impression a reasonable investor would have taken away from the recommendation.

A loss alone does not create a misrepresentation claim. However, if your broker omitted material information that you would have needed to make an informed decision, that omission may be actionable even without an outright false statement. The standard is whether there was a material gap between what you were told and what a broker with a duty of candor should have told you.

FINRA arbitration claims must generally be filed within six years of the event giving rise to the claim. Federal securities fraud claims under Rule 10b-5 have a two-year period from discovery with a five-year outer limit. State law fraud claims may have different limitation periods. Because multiple deadlines may apply simultaneously, consulting an attorney promptly is important.

No Fee Unless We Win

What You Were Told Mattered. So Does What You Were Not Told.

If your investment decision was based on information that was false, incomplete, or deliberately misleading, you may have a claim for full recovery of your losses. Contact the firm for a free, confidential evaluation.

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