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Fiduciary
The fiduciary duty is a legal relationship between two or more parties (most commonly a "fiduciary" or "trustee" and a "principal" or "beneficiary") that in English common law is arguably the most important concept within the portion of the legal system known as equity. In the United Kingdom, the Judicature Acts merged the courts of Equity (historically based in England's Court of Chancery) with the courts of common law, and as a result the concept of fiduciary duty also became usable in common law courts.
“ A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.[1] ”A fiduciary duty is the highest standard of care at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The fiduciary relationship is highlighted by good faith, loyalty, and trust, and the word itself originally comes from the Latin fides, meaning faith, and fiducia.
When a fiduciary duty is imposed, equity requires a stricter standard of behavior than the comparable tortious duty of care at common law. It is said the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where his fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from his fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd"[2] and that "[t]he distinguishing or overriding duty of a fiduciary is the obligation of undivided loyalty."[3]
On Fiduciary Bonds and Fiduciary Insurance
Well, I suppose nothing could be located more squarely at the intersection of the two topics in this blog’s title than the difference between fiduciary liability insurance (which lets fiduciaries sleep at night) and fiduciary bonds (which protects a plan’s assets, rather than insuring the fiduciaries themselves)...
Fiduciary Duties of Officers and Directors: Gantler v. Stephens (Fiduciary Duties of Directors)(Part 4)
We are examining the recent decision by the Delaware Supreme Court in Gantler v. Stephens.
One area where the Court clarified the law in relatively unequivocal terms was to hold that officers had fiduciary duties and the duties were the same as directors...
To Be or Not to Be (a Fiduciary, That Is)
I talked about a case last week that addressed the damages aspect of making out a breach of fiduciary duty claim related to stock drop type issues, and pointed out the broad, ambiguous and easy to manipulate nature of a damages claim in that scenario...
A fiduciary by any other name . . . .
Thanks to Gordon, Usha, Michelle, Larry, and others who've written here and elsewhere on the fiduciary duty issue. I admit...
No Fiduciary Breach
The New York Court of Appeals today held that a lawsuit alleging, among other things, breach of fiduciary duty against an Orthodox rabbi by a women with whom he was alleged to have had a 3 1/2 year intimate affair...
The Amateur Fiduciary
Geez, I hate to do this, but sometimes you have to play connect the dots. Reading this story about amateur (some would call it democratically run - small d, local government style) municipal pension plans and their investment strategies that got them caught up in the current collateralized debt obligation/securitization mess, I kept thinking to myself, where is the responsible, professional, knowledgeable fiduciary (or fiduciary retained vendor) in the investment decisions being chronicled...
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