Breach of Fiduciary Duty & Conflicts of Interest Claims

A fiduciary duty is a term of art describing a relationship between two parties whereby one party is obligated to act only in the best interest of the other. The person who is required to act in the other’s best interest is referred to as the “fiduciary.” At its most basic level, an investor may have a breach of fiduciary duty claim if they believe that someone (i.e. an investment sponsor, financial adviser, accountant, attorney) put their own self interests ahead of theirs causing them harm. Certainly, there are many more complex legal nuisances, but this basic inquiry is at the heart of every fiduciary duty claim.

In our experience, most fiduciary duty litigation also involves one or more conflicts of interest. A common fact pattern often involves an investment professional recommending an investment to an investor that is unsuitable in order to generate a lucrative commission. Another common fact pattern involves financial advisers who convince their clients to invest in securities offerings that the financial adviser personally owns and operated, which is a very serious conflict of interest.

If you, or someone you know, believes that you have a claim based on a conflict of interest or breach of fiduciary duty, contact us today for a free and confidential consultation.

Who is a fiduciary?

A fiduciary is someone who has to act in another person’s best interests.

What are examples of relationships with fiduciary duties?

Attorney/Client, Accountant/Client, Guardian/Ward, Trustee/Trust Beneficiary

Is my financial adviser a fiduciary?

This is a more complex question than most investors realize. Anyone registered as a financial adviser under the Financial Adviser Act of 1944 is, but others may not be – it depends. The only way to know for sure is by calling FINRA, the Securities and Exchange Commission or the state where they do business to ask.

Why aren’t all stock brokers and financial advisers fiduciaries?

We think they should be, but it is a very controversial political question. The financial industry has a very powerful lobby and is fighting any attempt to hold all financial professionals to a fiduciary standard.