Brokers Must Provide Investors Key Information About A Security


It is important to understand the benefits and risks that an investment product possesses. This knowledge helps investors make informed decisions when determining how to allocate their portfolios. Brokers and brokerage firms have a duty to provide investors with adequate information to help ensure they understand the pros and cons of each decision.

Since 1990, Timothy J. Dennin, P.C., has helped investors throughout Long Island and across the United States, and has held brokers and brokerage firms accountable for their misconduct. Our track record of successes is unparalleled, having won numerous six- and seven-figure settlements on behalf of our domestic and foreign clients after instances of stockbroker fraud.

What Is Considered A Material Fact?

Broker misconduct may occur if the firm or the broker either misrepresents or omits material facts about an investment. Material facts include, but are not limited to:

  • The inherent risks present in the underlying investment
  • Any charges or fees that may be involved when trading or owning a security
  • Relevant company financial information
  • Technical and/or analytical information such as a bond’s rating, the liquidity of the market for the security, the brokerage firm’s proprietary trading or the price history of a stock

Understanding A Broker’s Duty Of Care Obligations

There are common misconceptions surrounding what responsibilities a broker does and does not have. As a rule, a broker does not have to actively monitor clients’ portfolios. A broker’s duty of care will be applicable in the following two scenarios:

  • The broker makes a recommendation to buy, hold or sell an investment
  • The broker recommends an investment strategy

There are several acts that are included within brokers’ duties of care, including acting in good faith, making suitable recommendations and disclosing all material facts regarding a security or investment strategy. When brokers and investment firms fail to live up to FINRA’s standards, attorney Timothy J. Dennin aggressively pursues justice on behalf of investors across the country.

Over 25 Years Of Success In Broker Misconduct Cases

No matter what improper or illegal act your broker took, our lawyer understands how to put your case in a strong position. Speak with us in Northport or New York City during a free initial consultation by emailing us or calling 866-437-9475.