Also known as: personal benefits
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A private advantage or gain accruing to an individual in a position of trust or control rather than to the entity or its stakeholders. Receipt of such a benefit can establish a breach of fiduciary duty.
A private advantage or gain accruing to an individual in a position of trust or control rather than to the entity or its stakeholders. Receipt of such a benefit can establish a breach of fiduciary duty.
Select any source to read its text and confirm it supports the definition.
The exclusive advantage enjoyed by the holder of a power to destroy an interest. The period during which an interest remains subject to such a power is excluded when measuring the perpetuities period.
Select any source to read its text and confirm it supports the definition.
The exclusive advantage enjoyed by the holder of a power to destroy an interest. The period during which an interest remains subject to such a power is excluded when measuring the perpetuities period.
Each sense below has its own examples, sources, and questions.
Pedro Pacheco incorporated each of his cabs as a separate corporation with minimal capital. When one cab injured a pedestrian, the victim sought to hold Pacheco personally liable. The court refused to pierce the veil because the corporations were not shown to have been used to defraud creditors or operated solely for Pacheco's personal benefit.
Patrick Phan, an analyst, received material nonpublic information from a corporate insider who was a close friend. Phan traded and shared the tip with others. The government proved the insider received a personal benefit from the friendship gift, supporting liability for the remote tippees who knew of the breach.
Phoebe Park, a corporate officer, disclosed upcoming earnings data to her brother so he could trade. The disclosure was treated as a gift conferring a personal benefit on the officer, satisfying the breach element even without any monetary return to her.
Peter Park, a financial printer, learned the contents of upcoming takeover announcements while preparing the documents. He traded on the information for his own account. Because the information was acquired in a fiduciary capacity and used for personal benefit, his trading violated the disclose-or-abstain rule.
Priya Prasad, a Wall Street Journal columnist, shared the subject of her upcoming Heard on the Street column with her roommate before publication. The roommate traded profitably. The column's pre-publication contents were the Journal's confidential information, and using it for personal benefit supported mail and wire fraud liability.
No. A personal benefit can be inferred from a gift of information to a trading relative or friend even without any monetary exchange. The gift itself supplies the required personal benefit to the tipper.
Supporting sources
Undercapitalization by itself is insufficient. Liability requires an additional showing that the corporation was used to perpetrate a fraud or was operated as the alter ego of its shareholders for their personal benefit.
Supporting sources
Paula Pierce held a power to revoke a trust that limited future interests in family land. Because the power could be exercised for her exclusive personal benefit, the time during which the power remained outstanding was excluded from the perpetuities calculation, validating the limitation.
The period during which an interest is destructible at the uncontrolled volition and for the exclusive personal benefit of the power holder is excluded from the perpetuities period.
Supporting sources
…virtue of a confidential or fiduciary relationship with another is not free to exploit that knowledge or information for his own personal benefit but must account to his principal for any profits derived therefrom.” Diamond v. Oreamuno , 24 N. Y. 2d 494, 497, 248 N. E. 2d 910, 912 (1969); see also Restatement (Second) of Agency…