18.3 Securities-Misrepresentations or Omissions-Materiality is a legal term that applies to the disclosure of information regarding securities. It refers to the fact that securities issuers must disclose all material information related to the security to potential investors. Material information is defined as any information which may affect an investor’s decision to buy or sell the security. This includes information about the issuer, such as financial statements, corporate governance, and ownership structure, as well as information about the security itself, such as its features, risks, and performance. There are two types of 18.3 Securities-Misrepresentations or Omissions-Materiality: affirmative misrepresentations and omissions. Affirmative misrepresentations occur when an issuer knowingly or recklessly misrepresents material information about the security. Omissions occur when the issuer fails to disclose material information that is required by law. Both types of misrepresentations or omissions can result in legal liability for the issuer.