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Securities, Options and Futures Consultants

STOCK ISSUES

Stock Broker Misrepresentation ...

Misrepresentation or omission of material information in making recommendations are types of stock broker fraud that can occur when a broker does not fairly and fully disclose all known risks associated with a particular investment and losses are incurred as a result.

The offense is also present in cases where the broker has, without reasonable basis, offered predictions or opinions about future stock performance or claims to have inside information about the issuing company, both of which are common elements of stocks promoted through boiler room operations.

Failure to disclose all associated fees, commissions or other charges is yet another example. In extreme cases, the fraud has included issuance of bogus account statements or recommendations of shares in companies the stock broker knows to be overvalued or worthless.