Breach Of Fiduciary Duty Research Articles

Keeping them “Honest”: Breach of Fiduciary Duty and Liability for Dishonest Assistance

Keeping them “Honest”: Breach of Fiduciary Duty and Liability for Dishonest Assistance

Breach of Fiduciary Duty in Trade Secret Infringement Cases: Brief Analysis of the Criminal Judgment of Supreme Court (110) Tai-shang Tsu No. 2922

Breach of Fiduciary Duty in Trade Secret Infringement Cases: Brief Analysis of the Criminal Judgment of Supreme Court (110) Tai-shang Tsu No. 2922

Proprietary claims by constructive trustees

Abstract If a fraudster obtains money by deceit, breach of trust or breach of fiduciary duty and seeks to launder that money by passing it through a chain of companies, the victim of the fraud will generally have an equitable proprietary claim to the proceeds in the hands of the ultimate recipient. But what of the companies involved in laundering the money? If they are put into liquidation, can they, by their liquidators, also make a proprietary claim to the proceeds? The answer to this question may be important, particularly in complex fraud litigation where the identity of the claimant can have far-reaching substantive, jurisdictional and tactical consequences.

Corporate governance at Pinterest: time for more changes?

Research methodology Data for the case came from public sources, including legal proceedings, court filings, company press releases and Securities and Exchange Commission filings. Case overview/synopsis In June 2020, former Pinterest employees made public charges of gender and racial discrimination. Despite changes implemented by the company, several Pinterest shareholders filed derivative lawsuits charging the company with breach of fiduciary duty, waste of corporate assets, abuse of control and violating federal securities laws. The case provides an overview of the company’s management, board and stock structures, as well as information on the shareholders who sued the company and their concerns. The case raises substantial questions about management’s and board member’s responsibilities in corporate governance, illustrates how stock structures can be used to impede governance and suggests ways to evaluate activist shareholders. Complexity academic level This case is appropriate for graduate, advanced undergraduate or executive education courses in strategy, corporate governance or strategic human resources that discuss corporate governance, fiduciary responsibilities, designing workplace culture or management responses to shareholders. Instructors can apply two sets of theories and frameworks to this case: theories of corporate governance and Hirschman’s (1970) exit, voice or loyalty framework in the context of shareholder activism.

Business Valuation Cases in Brief

Business Valuation Cases in Brief

Fiduciary Duties, Secret Profits, and the Illegality Defence: Crown Prosecution Service v Aquila Advisory Ltd [2021] UKSC 49

Abstract CPS v Aquila Advisory Ltd has provided a welcomed judgment on the application of the illegality defence in the context of secret profits accrued in breach of fiduciary duties. The judgment clarifies the priority to be given to constructive trusts over unauthorised fiduciary profits in the face of CPS confiscation orders, and examines the interrelationship between the rules of attribution and the application of the illegality defence today, namely whether a director’s unlawful intention can be attributed to their company to prevent the company, on illegality grounds, from exercising a proprietary interest over the secret profits accrued.

The Need to Legalize and Regulate Insider Trading - An Analysis

Insider trading is perceived as a problem across capital mar-kets. The Securities Exchange Board of India (SEBI) created the SEBI (Prohibition of Insider Trading) Regulations, 2015, which criminalizes insider trading. However, insider trading laws have faced several problems at the implementation and enforcement stage. This article considers these problems from the viewpoint of the economic rationale that insider trading should be permitted in capital markets and thus le-galized. These economic arguments have largely been ig-nored by regulators who have continued to come down hard upon insider trading, despite limited success. Moreover, due to concerns related to privacy, insider trading investigations may face greater hurdles in the future. This article takes these factors and economic arguments into consideration and balances them against the regulators' concerns to suggest that insider trading be not only prima facie legalized, but also regulated when there is a breach of fiduciary duties or when there is a dissemination of positive information.

A challenge to the utility and distinctiveness of the good man theory of equity

Abstract This article provides a critical analysis of the ‘good man’ theory of equity which suggests that equity requires defendants to act as good men by performing primary obligations rather than providing compensation for breach. It examines the practical consequences of applying the theory in the contexts of disgorgement of bribes obtained in breach of fiduciary duty and equitable compensation for breach of trust. It also critically analyses the theory’s foundations through the lenses of legal taxonomy and legal history and philosophy and makes the case for the theory’s abolition.

Landmark Cases in Tracing: Re Tilley's Will Trusts (1967) and Turner v Jacob (2006)

This is a sample chapter for a proposal, Landmark Cases in Tracing, made by Derek Whayman (Newcastle University) and Katy Barnett (Melbourne University). The issue for the first instance judges in Re Tilley’s Will Trusts and Turner v Jacob was very simple: could a beneficial interest under a trust be traced into substitute property after being mixed with non-trust money where the trustee had not set out to use trust money and had not used it? The far more fundamental questions were not expressly considered in the judgments but are addressed in this paper. What is the basis of allowing access to substitute property? What is the basis of allowing access to any increase in value of that property? What is the basis of allowing priority in insolvency? Does the underlying cause of action matter to the process of identifying claimable value, i.e. to what extent is tracing, the process, divisible from tracing, the claim? It is argued that the difficult fact patterns presented in these cases demands the following answers. The basis of allowing increases in value is a breach of fiduciary duty. To allow priority in insolvency what is required is a breach of trust. Consequently it therefore impossible to separate process and claim. Conversely, if one accepts the obiter dicta in the leading case of Foskett v McKeown, that tracing, the process, is separate to these matters of fault and tracing, the claim, is a right of property, injustices result. These apparently minor cases therefore have major ramifications for the law of tracing both in terms of its conceptualisation and practical application.

Liability in Russian Corporate Law

Liability issues related to corporate activities are primarily regulated by general and special rules of the Civil Law in Russia that are mainly dispositive. The general liability rules consist of tort and contract liability provisions of the Civil Code. Special corporate norms are, in turn, included in the Civil Code provisions on juristic persons and legislation regulating corporate forms, and they concern liability of founders, shareholders and corporation as well as executives of corporation. The main form of civil liability is compensation for damages, the award for which generally requires that the illegal action and the caused damages as well as their causal relationship and the fault for causing the damages is proved in accordance with the rules on presumptions and burden of proof provided by the procedural rules. Traditionally, Russian civil liability rules have relied on the concept of illegality of an action (or breach of an obligation) that is to cause liability, which reflects the dominant role of legal supervision in the Russian legal system. However, in the event of liability of corporate executives, a breach of fiduciary duties could be regarded sufficient as a ground to qualify their actions as illegal without particular reference to concrete legal norms. Keywords: Civil liability; Corporation; Corporate executives; Illegality

UBH Ruling Called an Enormous Victory for Patients, Wake-Up Call to Insurers

UBH Ruling Called an Enormous Victory for Patients, Wake-Up Call to Insurers

Conflict, Profit, Bias, Misuse of Power: Dimensions of Governance

Norms prohibiting conflicts of interest apply in private fiduciary relationships and also to many public office holders. Whether or not such relationships are founded on trust, such norms can cultivate trust towards those holding governance authority, whether in interpersonal, civic or political relationships. In legal and philosophical discourse, however, conflicts of interest are rarely carefully defined. It has become a commonplace that ‘not every breach of duty by a fiduciary is a breach of fiduciary duty’. We must now go on to realize that ‘not every improper action by one who must avoid conflicts of interest is a conflict of interest’. A conflict of interest arises when duty- bound judgment is exercised in the presence of a conflicting interest. There can be conflicts that are not conflicts of interest; and there can be potential conflicts as well as actual ones. The simple misuse of power is not itself conflict of interest; on the contrary, it is the problem that the rules that forbid acting in a conflict situation aim to avoid. Bias is not identical with conflict of interest, although some kinds of bias arise from conflicts. Unauthorized profits are none of the above. They represent a different dimension of the relationship: not the supervision of powers, but the simple fact that when acting for another, one may not extract benefits for oneself. The rules about conflicts can foster trust in proper decision-making, while the rule against unauthorized profits can foster trust in the proper separation between a person’s private and official actions.

Limiting the fiduciary’s account of profits: but-for causation?

Abstract In an account of profits for breach of fiduciary duty, courts have understandably required some form of nexus between the breach and the gains to be disgorged, but have otherwise struggled to articulate a precise test. In the recent case of UVJ v UVH, the Singapore Court of Appeal broke new ground by requiring but-for causation, apparently branching off from the Anglo-Australian jurisprudence which advocates a more liberal approach to causation. While the but-for test is practically appealing as a technique well known to various areas of law, this article seeks to assess the normative justifications for such a bold move, in view of the attendant issues of deterrence, the unique policy of fiduciary law, and the juridical nature of an account of profits.

Negotiating Damages after One Step: Employment Team Move and Misuse of Confidential Information Cases

This article addresses monetary remedies in employment team move and misuse of confidential information cases. It argues that, after the Supreme Court's decision in One Step (Support) Ltd v Morris-Garner, negotiating (previously Wrotham Park) damages offer a useful additional compensatory tool in misuse of confidential information cases. They can help overcome some of the difficulties with ordinary contractual damages, equitable remedies for breach of fiduciary duty and confidence and limitations in injunctive relief. While One Step is restrictive overall, there is a real role for negotiating damages in employment cases where misuse of confidential information is the sole or predominant breach of contract. The well-established Faccenda approach is suggested for identifying the requisite confidential information.

Does Closing a University because of the Corona Virus Constitute Negligence or a Breach of Fiduciary Duty?

This paper reviews the current Corona virus situation, then examines the legal definitions of negligence and fiduciary duty in an attempt to determine whether closing a university because of health concerns over the Corona virus might result in legal liability for the university’s board members and relevant university administrators.

Fiduciaries, bribes and constructive trusts—a policy-based justification

Abstract The Supreme Court in FHR European Ventures LLP v Cedar Capital Partners LLC [2015] AC 250 made clear that a fiduciary who breaches his fiduciary duties by receiving a bribe will hold that bribe on constructive trust for his principal. This article suggests that the law’s response to a breach of fiduciary duty is focused on the wrong of breach, rather than on enforcing the fiduciary’s primary duties. Viewed through this prism, a more thorough justification than that identified by the Supreme Court is necessary for imposing a constructive trust over a bribe. This article suggests that there is no principled reason for imposing a constructive trust, but that the justification is rooted in the policies underlying the entirety of the law of fiduciary duties—deterrence and prophylaxis.

Issues in Mutual Fund Soft-Dollar Trades

The purposes of this article are to explain the nature, use, and costs of mutual fund soft-dollar trading, including the legal “safe harbor,” “soft dollars,” “bundled commissions,” trade disclosure, agency conflicts, and empirical trading costs. The safe harbor protects investment managers from liability for a breach of fiduciary duty solely on the basis they paid more than lowest commission rates to receive brokerage and research services. “Soft dollars” are the incremental commissions funds pay for research produced or provided by brokers. The SEC and Congress (as to Section 28(e)) should “unbundle” soft dollar commissions by requiring separation of soft dollars from total trade commissions.Opaque soft dollar commissions and former bundled distribution commissions exacerbate agency conflicts between fund advisers and shareholders. The conflicts include excessive and more costly soft dollar commissions that bring financial benefits to both fund advisers and brokers.Fund advisers are motivated to use soft dollar commissions to increase complexity and to obfuscate research payments. Soft dollar commissions are opaque and have a positive impact on investor inflows, but at the expense of lower fund performance. Expensed research and distribution payments are significantly less detrimental to fund performance, but their greater transparency has a negative impact on investor inflows.With or without unbundling and until prohibition of soft-dollar trades, the SEC should require mutual funds to disclose two sets of information in the statement of additional information (SAI), the shareholder annual report, and for SEC online files: (1) payments to non-soft-dollar brokers for (a) brokerage commissions and (b) trade execution costs (inclusive); (2) payments to soft-dollar brokers for (a) brokerage commissions and (b) trade execution costs (inclusive); and (c) broker soft-dollar payments to fund advisers.Agency conflicted soft-dollar trades may be characterized as higher-cost trades that provide financial benefits both to mutual fund advisers and brokers, and reduce fund assets and shareholder returns.Soft-dollar trades have higher implicit (market impact trade execution costs), and higher explicit (brokerage commissions) and total trade costs than full-service broker trades. The larger difference in implicit trade costs is the major cause of the difference in total trade costs. Explicit costs of soft-dollar broker trades are only one basis point higher than costs of full-service broker trades for both buys (sells), but implicit costs are 29 (24) basis points higher. Total soft-dollar trade costs are 30 (25) basis points higher than costs of full-service broker trades for buys (sells).The average mutual fund pays 27 basis points in brokerage commissions per dollar of assets with an expense ratio of 134 basis points. A one basis point increase in brokerage commissions is associated with a decline of five to six basis points in fund returns. The negative effect of brokerage commissions on fund returns is four times as large as the effect of expense ratios.

Case Study as to Trustee's Breach of Fiduciary Duties

This is a tale of a trustee's breach of fiduciary duties, as related in a court opinion involving a case where a trustee of a charity brought suit against the trustee of another charity (Cook v. Marshall (E.D. La., February 21)).

Chasing will-o’-the-wisp: the English courts’ impossible quest for ‘certainty’ in constructive trusts over bribes

After years of uncertainty, FHR v Mankarious has sought to impose a ‘simple answer’ in relation to remedies regarding bribes made in breach of fiduciary duty, namely that a constructive trust will always be imposed. The English approach can be contrasted with the approach in many other common law jurisdictions, including Australia and the USA. It is suggested that the English quest for ‘certainty’ and a ‘simple answer’ is a will-o’-the-wisp, which will never be found. ‘Recalcitrant experiences’ or specific fact scenarios will always undermine the background justifications for the general rule expressed by the UK Supreme Court.

Fiduciary Investments in Cannabis Securities

This paper analyzes whether an investment in cannabis securities would be a breach of fiduciary duty under fiduciary investment standards. This paper considers legality issues arising from marijuana-related securities under criminal statutes and securities laws and the prudence of investing in such securities under fiduciary investment principles, including the prudent investor rule.