It is also important to be aware of your responsibilities as investors and the regulator's role in the Customer Complaint process. The Problem Misrepresentation can occur when a broker purposefully makes untrue representations of material facts or omits material information. This can happen in any security in any account, but this problem is commonly found with low-priced, speculative securities because of their increased risk. How Problem Is Detected Investor loses money on investment. Upon review of the prospectus, confirmations, account statements, or other documents, the investor discovers information that does not coincide with representation made by the broker.
Investor calls broker to check on status and learns about material information previously unknown.
Never invest in a product you don't understand. Keep contemporaneous notes of your conversations with the broker. This is most frequently found with low-priced, speculative securities. Investor receives frequent phone calls. If it sounds too good to be true, it usually is.