Securities Litigation Attorneys Representing Clients Nationwide
When it comes to investing, most investors rely heavily on the information fed to them by their brokers, hoping they will not be steered wrong. In a perfect world, that should always be the case, however there have been cases of clients receiving misleading information that led to financial losses. Even if the broker was unaware that the information they imparted is misleading, there can still be a case depending on the circumstances.
What do you do when you have been the victim of misleading information, also known as misrepresentation? Do not worry – our attorneys at Weltz Law are experienced in securities litigation and can assist you with claiming compensation from losses suffered due to misleading information.
In the business world, agreements are most often made in the form of written contracts. This contract is held as proof that both parties are aware of and consent to the terms of the agreement. However, when a false claim is made – be it written, verbal or even through a simple gesture – the contract can be deemed invalid due to the fact that certain information contained within it is misleading. There are three different kinds of misrepresentation, which we will go into more detail about below.
Fraudulent misrepresentation occurs when a party knowingly made a false statement to induce the other party into signing a contract. Let’s take the example of an issuer claiming that their investment product is the only one of its kind and can promise high returns. It is revealed later on that the issuer knew this to be untrue and there are, in fact, many similar products out there. Because the issuer knew this claim to be false when making it, it is considered fraudulent misrepresentation and the contract is now invalid. Furthermore, the victim is entitled to take legal action and receive compensation if a financial or material loss has been suffered.
Negligent misrepresentation is closely related to the failure to perform due diligence before recommending a product. Simply put, it means that the party who provided false information was unsure of the veracity of their statement and did not attempt to verify it. Taking the same example about the issuer and their investment product, this means the issuer is unsure whether their product really is one of a kind and did not bother to do the relevant investigation to prove or disprove it. Compensation for damages can be legally sought in cases of negligent misrepresentation.
You may be asking, what then, if the other party did not know the information they were providing is false at the time of doing so? If that is so, you may have a case of innocent misrepresentation. This is remedied simply by declaring the contract null and void, and both parties are no longer under obligation to any of its terms.