The business world is fiercely competitive and ever-changing. Its competitive nature drives some to act badly to try to get ahead. However, there are laws that prevent companies and individuals from acting unethically. When people step outside of these boundaries, they can be held accountable for their actions.
Who is a fiduciary?
A person who is responsible for managing someone else’s money or property is known as a fiduciary. Some examples of fiduciary relationships are:
- A corporate board member to a shareholder
- An attorney to a client
- An accountant to a client
- A trustee to a beneficiary
- A business partner to his or her other partners
A fiduciary has a duty to act in the best interests of the people he or she represents. When fiduciaries do not act in the best interests of the people they represent, this is known as a breach of fiduciary duty.
A breach causes financial losses
A breach of fiduciary duty results in financial harm to the party represented. An individual who believes he or she has suffered from a breach of fiduciary duty has these actions. To show a breach of fiduciary duty occurred, you must prove:
- The accused had a fiduciary duty to you. That duty includes disclosing all relevant financial information. It also should include putting your interests before their own, as well as acting in a responsible way.
- The accused breached that duty. This breach could have occurred because they did not disclose pertinent information, acted in their own best interests or misused funds.
- The breach in duty cost you financially. You need to have most money to bring a breach of fiduciary duty suit. If the accused breached their duty, but you did not lose money, you cannot move forward with a suit.
With a breach of fiduciary duty lawsuit, you try to recover the money you lost. You may also be able to recover punitive damages, which are damages awarded to punish the accused. These damages are only given if it is proven that the accused acted out of malice or committed fraud.