When making recommendations or soliciting the purchase or sale of an investment brokers are required to disclose all material facts about the investment and transaction to include the risks, fees and costs associated.  Material facts are things that would assist a reasonable investor in deciding whether or not to buy or sell a security.   Brokers that misrepresent or fail to disclose the risks associated with an investment and other material facts would be in violation of Federal and state securities laws and industry regulations.  For example, a broker recommending the purchase of an investment and failing to disclose the fact that the performance of the investment is based on the results of risky financial instruments may be liable to the investor for losses incurred.

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