We represent investors who lost money invested in products recommended to them by their brokers or investment advisors without adequate due diligence. Prior to recommending and selling an investment product to a customer, a brokerage firm and an investment professional have a duty to conduct adequate due diligence as to that product.

Due diligence is a vital step in the process of preparing a company for a securities offering to investors. The essence of due diligence is a reasonable investigation. The goal of the investigation is for the brokerage firm or the advisor to satisfy themselves that the issuer of securities is misrepresenting or omitting material facts from its offering documents, and the investment product is suitable to at least some investors.

The due diligence investigation generally commences with inquiries into the issuer’s business and operations. Any red flags must be carefully pursued. And, the brokerage firm may not simply rest upon self-serving statements and assurances by the issuer. It has a duty to verify those statements.

Brokerage firms that fail to adequately verify an investment product before selling it to their customers may be held liable by such customers for their losses. We have represented many investors whose investment professionals and brokerage firms improperly sold them investments, without first conducting adequate due diligence as to those investments. Frequently, red flags that accompanied those investments were not investigated, and the brokerage firms simply parroted the issuer’s assurances, without checking whether or not they were truthful.

We have represented investors in “negligent due diligence” cases against their brokerage firms involving products such as:

  • Real estate investments (including REITs)
    Oil and gas investments
    Other energy-related investments (e.g. ethanol)
    Debt factoring
    Municipal bonds
    Commercial debt

If you believe you may have lost money in an investment product due to inadequate due diligence by the brokerage firm that sold you the product, please contact us for a free, no-obligation consultation regarding your legal situation and potential recovery options, by phone at 888-998- 0530, via email at arosca@roscalaw.com, or through the contact form on this page.