Fiduciary Duty Conflicts of Interest

News & Analysis as of

Chancery Dismisses Complaint for Failure to Allege Noncompliance

A principal difference between alternative entities and corporations under Delaware law is the ability in the former to modify or eliminate fiduciary duties. A Delaware court is required by statute to give effect to the...more

Delaware Court Holds Interested Directors Liable for "Fairer Price" In Going Private Transaction

In one of the largest ever M&A-related recoveries for shareholders, Vice Chancellor J. Travis Laster ordered Dole Food Company, Inc.’s Chairman and CEO, David Murdock, and Dole’s former President, COO and General Counsel, C....more

A Compilation of Enforcement and Non-Enforcement Actions

Non-Enforcement - Form PF — What Purpose? SEC registered investment advisers with at least $150 million of assets under management in private funds are required to periodically file Form PF with the SEC. The...more

RMBS Investors Sue U.S. Bank for Trust Losses

On August 5, 2015, RMBS investors filed a putative class action against U.S. Bank, N.A. in the Supreme Court for the State of New York. The investors assert that U.S. Bank, as trustee for the MASTR Adjustable Rate Mortgage...more

Why Argentina's Petition to Vacate an Award in AWG Group Ltd v. Republic of Argentina Matters for Future Arbitrations

On 6 July 2015, Argentina filed with the U.S. District Court for the District of Columbia a petition to vacate an UNCITRAL arbitration award of approximately $20 million rendered in favour of AWG Group Ltd (No. 15-cv-01057, 6...more

SEC Fines Adviser $20 Million Based on Conflicts

Failure to disclose conflicts of interest and/or to comply with firm procedures are the predicates for a series of SEC enforcement actions involving regulated entities. The most recent example of these trends is an action...more

Dead Hand Proxy Puts Create Litigation Risk for Lenders

Why it matters - In a noteworthy decision, the Delaware Court of Chancery ruled that a lender could be held liable for aiding and abetting a breach of fiduciary duty by directors of a public company borrower by including...more

SEC Regulation of Private Equity Funds

What you need to know: The Securities and Exchange Commission’s Office of Compliance Inspections and Examinations recently issued its examination priorities for 2015, many of which impact the private equity...more

Analysis: The Impact of the DOL’s Fiduciary Proposal on Sales of Insurance Products

This paper explains the basis for our conclusions about the impact of the Department of Labor (DOL) proposal to amend the fiduciary investment advice regulation and the prohibited transaction (PT) exemptions for sales of...more

Corporate Investigations & White Collar Defense - May 2015

It’s an Absolute Privilege to Meet You! Texas Supreme Court Rules That Internal Investigation Report Provided by Shell Oil to DOJ Enjoys “Absolute Privilege” - Why it matters: On May 15, 2015, the Texas Supreme Court...more

Delaware Supreme Court Clarifies That Section 102(b)(7) Charter Provisions May Be Basis For Dismissal At The Pleading Stage In...

On May 14, 2015, the Delaware Supreme Court clarified that, even in conflict-of-interest transactions subject to "entire fairness" review, breach of fiduciary duty claims against independent, disinterested directors should be...more

DOL’s Proposal To Expand Fiduciary Definition Would Bring Many Service Providers Into Scope

As we previously reported, the US Department of Labor (DOL) released its reproposed rule “Definition of the Term ‘Fiduciary’; Conflict of Interest Rule—Investment Advice” on April 14. The initial deadline for comments on the...more

Firm Sanctioned for Breach of Fiduciary Duty and Violation of the Compliance Rule

The SEC sanctioned a registered investment adviser for breaching its fiduciary duty by failing to disclose to its clients a conflict of interest created by a portfolio manager’s outside business activity and personal...more

The DOL Seeks an Ideal Balance in a Brave New World of “Investment Advice” Under ERISA

The U.S. Department of Labor (the “DOL”) on April 14, 2015 issued the long-awaited re-proposal (the “2015 Proposed Regulations”) of the regulations defining “investment advice” in connection with the “fiduciary” rules under...more

DOL Proposes New Fiduciary Rule

Maybe it wasn’t Moses speaking from Mount Sinai, but the Department of Labor (DOL) proposed a new fiduciary rule that will change how retirement plan providers give advice. This is a re-proposal of a rule that was previously...more

The Financial Report - Volume 4, No. 6 • March 2015 (Global)

OSC Investor Advisory Panel annual report. The Ontario Securities Commission (OSC) Investor Advisory Panel submitted its 2013-14 annual report. The report summarizes the Panel’s current activities and priorities as well...more

Appointment Of Independent Directors On The Eve Of Bankruptcy: Why The Growing Trend?

In recent years, companies in financial distress have found “independent” directors to be useful to achieve protections for their board members. An independent director is a director – usually with no prior affiliation to the...more

Hedge Funds and Material Nonpublic Information: The Role of Deception, Duty, Breach, Personal Benefit and Knowledge in Creating...

The last thing hedge funds need is another wake up call about the risks of liability for trading on the basis of material nonpublic information. But if they did, a July 17 article in the Wall Street Journal would provide it....more

In the Rural/Metro Decision, Delaware Court Emphasizes Conflicts of Interest in Finding Breaches of Fiduciary Duties

Citing various conflicts of interests involving management, board members and financial advisors, Vice Chancellor Laster of the Delaware Court of Chancery found that the Board of Directors of Rural/Metro Corporation (“Rural”)...more

Nonprofit Law Revitalization Comes to New York

On December 18, 2013, New York Governor Andrew Cuomo signed into law the Nonprofit Revitalization Act of 2013 which modernizes the New York nonprofit corporation law. The Act overwhelmingly passed both houses of the New York...more

10 MLP Governance Facts

MLPs possess unique governance characteristics as compared to corporations.The number of master limited partnerships (MLPs) has grown significantly over the past five years, increasing from 59 in 2009 to over 100 in 2013. An...more

In re Trados: Directors Dodge a Bullet

Vice Chancellor J. Travis Laster’s August 16 post-trial opinion in In re Trados Inc. Shareholder Litigation1 (hereinafter, “In re Trados”) has attracted a significant amount of attention. Much as both the Chancery and the...more

Financial Advisory Update

Novel theories by plaintiffs’ lawyers need to foster novel approaches by M&A lawyers. A number of recent cases highlight the increasing risks for financial advisors and the lawyers who represent them. Financial...more

Investment Management Legal + Regulatory Update -- December 2013

In This Issue: Regulatory Updates - SEC Continues to Look at a Uniform Fiduciary Standard for Broker-Dealers and Investment Advisers; SEC Grants Unusual Exemptive Relief from Pay-to-Play “Time-Out” Provision;...more

A Tale Of Two States: Access To Attorney-Client Privilege Materials In Intra-Corporate Disputes Involving Close Corporations

Most people communicating with their lawyer rightfully believe their discussions are privileged and cannot be disclosed to others without permission. However, when litigation ensues, because the attorney-client privilege...more

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