Misrepresentation occurs when false information is provided by the seller of an investment to the customer. There are generally two types of misrepresentation: fraudulent misrepresentation and negligent misrepresentation.
Fraudulent misrepresentation occurs when a financial advisor intentionally misrepresents information about an investment to the customer in order to deceive them into purchasing. Negligent misrepresentation occurs when a financial advisor provides false information to the customer because he or she is careless or negligent.
Oftentimes, the safety of the investment is the false misrepresentation. For instance, a financial advisor might claim that an investment has little to no risk when, in fact, it has substantial risk. We have represented many investors where junk bonds were mispresented as safe. Another common misrepresentation occurs when an advisor claims that an investment is safe because it is backed by certain assets when, in fact, it is not.
When an investor relies on a false representation and loses money, the investor can bring a claim for misrepresentation.
Please contact us for a free and confidential case evaluation if you believe that you are a victim of misrepresentation.