Trusting your money to an investment broker always involves some degree of risk. However, if you lose a substantial portion of your finances in a relatively low-risk investment, it may be worth investigating potential instances of misrepresentation and omission.
Defining misrepresentation and omission
Losing your money in the stock market is not enough evidence on its own to prove broker misconduct. To prove misrepresentation, you must show that your broker took some type of affirmative action. Usually, this act involves a false or misleading statement of fact.
An omission, as you can probably guess, involves the failure to disclose essential facts to an investor. Both acts of misrepresentation and omission are taken seriously by the Financial Industry Regulatory Authority (FINRA). Brokers face severe sanctions for misleading investors.
Did your broker mislead you?
Your broker will likely cover up any evidence of misrepresentation or omission. You will have to uncover this evidence on your own or with the help of a skilled professional.
You may wish to perform your own analysis to determine whether it aligns with the analysis performed by your broker. Take note of any instances where your broker’s advice appears to run contrary to standard investment practices.
Taking steps to demand broker accountability
If your research and past communications with your broker point to suspected instances of misrepresentation and omission, you should begin taking steps to hold your broker accountable. It can seem overwhelming to question the decisions made by an investment professional. That’s why it’s important to have professional guidance of your own who can help you determine the best legal path forward.