As fiduciaries, financial professionals have a duty to adequately inform their customers about the risks and costs associated with any product or services that they are recommending. Liability not only occurs when there is outright fraud and deceit, but also when misrepresentations about an investment are done negligently. Misrepresentations include both misstatements of fact and omissions. An omission is a failure to give the customer all of the facts and information necessary in order for them to make an informed decision about an investment.

The fact that a prospectus may have been given to the customer does not automatically protect a stockbroker or other financial professional from being liable for securities fraud, misrepresentations or omissions.