Misrepresentation/Omissions – An Introduction

It is required by The Securities Act of 1933 that the publicly traded companies disclose their financial and other various important information to investors and potential investors. It prohibits fraud and misrepresentation in the sales of securities. The risks associated with investments must be disclosed by the broker to their clients. It is dictated by The National Association of Securities Dealers (NASD) that all the members send in their account statements to the clients at least once in every financial quarter. The statements should include sales, charges or credits, purchases, interest credits or debits, dividend payments, securities receipts or deliveries, dividend payments, transfer activity, and journal entries detailing funds or securities controlled by the broker. All the information provided should be free of deception and true.