Brokers have an obligation to give an investor all of the information that the investor needs in order to make an informed decision about whether they want to make a particular investment. Typically, this includes things like the risk of loss liquidity limitations, and prepayment risks. When the broker fails to disclose important information, or, even worse, tells the investor incorrect information about the investment, the broker and brokerage company can become liable for losses that the investor suffers from that investment.