Misrepresentations & Omissions
A misrepresentation is a false statement of material fact made to sell an investment; an omission is leaving out a fact a reasonable investor would need. Tracy Pride Stoneman represents investors in these claims in FINRA arbitration nationwide, from Westcliffe, Colorado.
By Tracy Pride Stoneman, securities arbitration attorney Updated
| What happened | Rule or law | How it is proved |
|---|---|---|
| A statement that was false when it was made | FINRA Rule 2020; Exchange Act §10(b) and Rule 10b-5; Securities Act §12(a)(2); state securities acts | Marketing material, emails, texts and recorded calls against the prospectus and the statements |
| Risks, fees or conflicts left out | Rule 2020; Regulation Best Interest disclosure obligation; FINRA Rule 2210 (communications must be fair and balanced) | The prospectus risk factors and fee tables against what the customer was told |
| Guarantees against loss or promised returns | FINRA Rule 2150(b) (no guarantees against loss); Rule 2210(d)(1)(B) (no promissory statements) | “Can’t lose,” “guaranteed,” “safe as a CD” in writing or on tape |
| Performance misstated | Rule 2210 | Hypothetical or backtested figures presented as actual; account statements |
A FINRA panel can award compensatory damages (out-of-pocket losses or market-adjusted “well-managed account” damages), interest, costs, attorney’s fees where a statute or contract allows them, and punitive damages in egregious cases. Claims must be filed within six years of the events under FINRA Rule 12206, and shorter state statutes of limitation may also apply.
If any of this sounds like your account, the next step costs nothing: a free, honest evaluation. Tell me what happened or call (719) 783-0303.
Common questions
Misrepresentations & Omissions: what clients ask
Does leaving something out count?
Yes. An omission of a material fact, such as not disclosing the real risk, the fees, or a conflict of interest, can be just as actionable as a false statement.
What if the risks were in the prospectus I received?
Disclosure in fine print does not necessarily excuse a broker who told you something different, or who recommended an investment that was unsuitable to begin with.
How do I prove what my broker told me?
Emails, texts, notes, marketing materials, and the pattern of your account all help. Testimony about the conversations matters too, and arbitrators weigh it alongside the documents.
Your move
A free evaluation has no downside other than your time.
Tell me what happened. I will tell you honestly whether you have a case worth pursuing — and every way I can be paid, including contingency: nothing unless you recover.