Also known as: breaches of a fiduciary duty · breach of fiduciary duty · breaches of fiduciary duty · breach of fiduciary duties · fiduciary breach
Written by attorneys · grounded in primary & secondary sources — see below
Conduct by a fiduciary that violates the duties of loyalty or care owed to the principal or beneficiary. The breach occurs when the fiduciary engages in undisclosed self-dealing, fails to disclose material information the principal would want, or acts for an adverse party without consent.
Bernard Bass formed Baxter Dynamics and sold his own land to the new corporation at a markup. He disclosed the sale only to two initial subscribers but not to later investors contemplated in the financing plan. The corporation recovered the secret profit because full disclosure and approval from all original investors had not occurred.
Brianna Burke, a partner at Blackwood Technologies' outside counsel, learned of an impending acquisition while advising the client. She purchased shares in the target for her own account before the deal was announced. The trades violated her fiduciary duty to the source of the confidential information.
Select any source to read its text and confirm it supports the definition.
Byron Bishop worked at a printing firm that prepared announcements of corporate takeovers. He bought shares in the target companies using the information he obtained while setting type. The purchases breached the duty arising from his access to the confidential material.
The directors of Boreal Energy faced a hostile bid and shifted from seeking the best price to protecting a management-favored transaction. They granted lockups that ended the active auction process. The change in strategy breached the duty to maximize shareholder value once a sale became inevitable.
Brenda Booth, a controlling shareholder, issued a proxy statement that omitted material facts about the fairness of a proposed merger. Minority shareholders relied on the incomplete disclosures when approving the transaction. The omissions breached the duty to provide accurate information in the solicitation materials.
Belinda Baxter and other officers of Bristol Steel learned of an impending drop in earnings. They sold their shares before the information became public. The sales breached the fiduciary duty not to use corporate information for personal trading advantage.
No. An agent's duty of loyalty requires acting solely for the principal's benefit and avoiding undisclosed conflicts. Profitability does not erase the breach that arises from secret self-dealing.
An agent must use reasonable efforts to provide information that is relevant to the agency and that the agent knows the principal would want, absent a superior duty to another party.
Yes. An agent may not act for an adverse party in a transaction within the scope of the agency unless the principal knows of and consents to the dual role.
The representative must exercise the care an ordinarily prudent person would use in managing their own property. Failure to obtain appraisals or adequate insurance for valuable assets can constitute a breach when the omissions cause loss.
…these issues: (1) Is a person who trades in securities for personal profit, using confidential information misappropriated in breach of a fiduciary duty to the source of the information, guilty of violating § 10(b) and Rule 10b-5? (2) Did the Commission exceed its rulemaking authority by adopting Rule 14e-3(a), which proscribes trading on…