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SEC, NASD and Securities Law Information Center

Misrepresentation and Omissions

A broker is liable to a client if that broker misrepresents material facts or omits to disclose material facts to the investor regarding an investment, and that client loses money as a result. Often these misrepresentations or omissions disguise the risk associated with a particular investment. A broker has a duty to fairly disclose all of the risks associated with an investment.

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