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This rule applies in both criminal and civil contexts. That means that any investor who loses money in any securities transaction after relying on false statements, misleading marketing, or incomplete disclosures may sue to recover their losses.

Peiffer Wolf has recovered hundreds of millions of dollars for its clients due to violations of the securities laws and is currently investigating numerous potential violations of Rule 10b-5 that victimized retail investors. If you invested in any of the securities or investment products that we are investigating, contact us for a Free Case Evaluation.

What Rule 10b-5 Prohibits

Rule 10b-5 makes it unlawful to:

• Make false or misleading statements about an investment,
• Leave out important facts that investors would consider significant,
• Use deceptive schemes or marketing tactics to sell investments, or
• Engage in other conduct that operates as a fraud on investors

The rule, adopted under the Securities Exchange Act of 1934, is intentionally broad to protect everyday investors from deceptive investment practices.

What a Potential Rule 10b-5 Case Looks Like

While Rule 10b-5 cases are complex, most of them fall under the same basic fact pattern:

• Investors purchase a publicly-traded stock or share of an investment fund (a “security”);
• The security experiences a significant drop in price or value; and
• Investors then learn that the company that issued or sold the security made false or misleading statements that concealed the reasons for the circumstances that led to that drop in price or value – for example, the company misrepresented test results showing that a new product would not perform as advertised, or concealed the loss of a major revenue source

In short, companies that issue or sell stocks cannot conceal known risks from or otherwise misstate existing information to potential investors. When they do, they may be liable for monetary damages under Rule 10b-5.

Red Flags Investors Should Watch For

You may have a viable claim under Rule 10b-5 if you:

• Purchased a publicly-traded stock or investment fund that experienced a significant drop in price or value
• A company that you purchased stock or other investment products from makes an after-the-fact or “corrective” disclosure of a previously-known risk or other misstated information
• You were given inaccurate, incomplete, or misleading information that you relied upon in making your decision to purchase or sell stock

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Peiffer Wolf is actively investigating certain securities that may have been sold using false, misleading, or incomplete information that exposed retail investors to undisclosed risks.

If you invested in any of the companies or securities that we are investigating, contact us for a Free Case Evaluation.