For instance, a broker might approach a client with an opportunity to invest in a start-up company or real estate venture. The broker assures the client of substantial returns, citing their personal belief in the venture’s success. However, the investment is not on the list of approved products offered by the broker’s firm and has not undergone the firm’s due diligence process. The client, relying on the trust established with the broker, agrees to invest, unaware of the lack of official oversight and potential risks involved.
