Fiduciary Duty

News & Analysis as of

DOL Releases Controversial Proposal, Signifying Regulatory Intent to Expand Fiduciary Standard

On April 14, 2015, the U.S. Department of Labor ("DOL") released a controversial proposal that would require financial advisors to put their clients' interests ahead of their own when recommending retirement investments....more

U.S. Department of Labor Issues Proposed Fiduciary Rules

Tuesday, the U.S. Department of Labor issued its highly anticipated re-proposed regulation addressing when a person providing investment advice with respect to an employee benefit plan is considered a fiduciary under ERISA....more

Avoiding Personal Liability: A Guide For Directors And Officers

According to the popular media, we are living in an era of corporate crime. Scandals like Enron, HealthSouth and WorldCom stretch so far back they seem like they are not even of this millennium. Among the milestones since...more

Combating pension scams

For some time now, the issue of transfer requests and pension scams (often referred to as pension liberation) has been a difficult one for trustees of occupational pension schemes. On the one hand, members may have rights to...more

Illinois Supreme Court Holds Captive Insurance Agents Owe Limited Tort Duty to Clients

Section 2-2201 of the Code of Civil Procedure provides that “[a]n insurance producer . . . shall exercise ordinary care and skill in renewing, procuring, binding, or placing the coverage requested by the insured or proposed...more

Courts Continue to Dismiss Shareholder Suits Based on FCPA Violations

On March 16, 2015, Judge Paul G. Gardephe of the Southern District of New York dismissed a shareholder derivative suit filed by Sylvia Pritika against the CEO and others of Avon Products Inc. ("Avon") alleging breach of...more

Court Of Chancery Issues Mother Of All In Pari Delicto Decisions

This and the AIG decisions are the leading decisions on when the in pari delicto defense works. The Court carefully summarizes the 3 exceptions to when in pari delecto bars a recovery: (1) the adverse interest exception, (2)...more

Financial Services Weekly News Roundup - March 2015 #4

Focus on Fiduciary Standards. In February the President’s Council of Economic Advisers (CEA) issued a Report on the Effects of Conflicted Investment Advice on Retirement Savings. In its conclusion, the Report estimated the...more

Coming Soon: Regulations for Uniform Fiduciary Standard

In testimony before the House Committee on Financial Services on March 24, 2015, SEC Chair Mary Jo White said that she supports a uniform fiduciary standard of conduct for broker-dealers and investment advisers that provide...more

The Trustee's Power to Loan

Trust agreements often give trustees the power to make loans. When and how to exercise the power should be given significant thought. Upholding the fiduciary duty owed to all beneficiaries is always a key concern. ...more

Must the Lessee Be Wary of the Executive Right Owner?

You are negotiating to take a big oil and gas lease. The run sheets show you are dealing with an executive right owner on behalf of himself and his NPRI owner. His proposed terms are odd: a lower-than-market royalty and a...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

Fortis Advisors LLC v. Dialog Semiconductor PLC, C.A. No. 9522-CB (Del. Ch. Jan. 30, 2015) (Bouchard, C.)

In this memorandum opinion, the Court of Chancery granted a motion to dismiss certain claims relating to a dispute over earn-out payments owed to the former equity holders of iWatt, Inc. (“iWatt”) following the sale of iWatt...more

Virtus Capital L.P. v. Eastman Chemical Co. et al., C.A. No. 9808-VCL (Del. Ch. Feb. 11, 2015) (Laster, V.C.)

In this decision, the Court of Chancery denied a motion to dismiss for lack of personal jurisdiction brought by an individual that controlled the majority stockholders of a Delaware corporation, holding that the complaint...more

Fiduciary Breach Claim Based On Oral Representation Can Proceed

A federal district court in New Jersey held that oral misrepresentations may support a breach of fiduciary duty claim under ERISA. Plaintiff Richard Lees was hired by American Re–Insurance Company, although he was paid by...more

Ninth Circuit Opinion May Open Litigation Doors Most Thought Closed

A recent Ninth Circuit Court of Appeals opinion charts potential new pathways for claims for damages resulting from portfolio losses by mutual fund shareholders against both a fund’s trustees and its investment adviser....more

Nine Fiduciary Accounting No Nos

When you’re a fiduciary under California’s Probate Code, such as a guardian or conservator, you’ll be required to prepare some type of fiduciary accounting for the court. You’ll probably hire an accountant to crunch the...more

White Calls for SEC to Adopt Uniform Fiduciary Standard

SEC Chair Mary Jo White said Tuesday that the SEC needs to move forward on a uniform fiduciary standard for the financial industry, including brokers. Addressing the annual meeting of the Securities Industry and Financial...more

Lewis v. Aimco Properties, L.P, et al., C.A. No. 9934-VCP (Del. Ch. Feb. 10, 2015) (Parsons, V.C.)

In this memorandum opinion, the Court of Chancery (i) granted in part certain defendants’ motion to dismiss for lack of subject matter jurisdiction, specifically ordering a stay pending arbitration; and (ii) granted certain...more

Sixth Circuit Rejects Claim that Disgorgement of Profits Is Appropriate Remedy in ERISA Benefit Denial Action

On March 5, 2015, the U.S. Court of Appeals for the Sixth Circuit, sitting en banc in the matter of Rochow v. Life Insurance Company of North America, 2015 WL 925794 (6th Cir. Mar. 5, 2015), reversed the finding of a prior...more

2014 Pension Plan Regulatory Highlights

The start of the new year is as good a time as any to look back at some of the employee benefits regulatory developments of 2014 that were not previously covered in this column. Originally published in Employee Benefit...more

White House Proposes New Rules to Protect Investors Saving for Retirement

You might think that the top priority of the broker or financial adviser managing your retirement funds is to maximize your returns, but that’s not always the case. Some steer their clients to bad retirement investments with...more

Breaching Fiduciary Cannot Seek Equitable Indemnity from Another Fiduciary

A California federal district court dismissed a plan fiduciary’s equitable indemnity claim because such claims are not available to a breaching fiduciary under ERISA. Plaintiff William Brown commenced a putative class action...more

Delinquent Contributing Employer May Be Fiduciary

The Second Circuit held that the owner of a contributing employer to multiemployer benefit plans breached his fiduciary duties by failing to make required contributions and was thus personally liable for the delinquencies,...more

Advisors Advantage - March 2015

In This Issue: - Human Emotional Mistakes A Retirement Plan Provider Should Avoid - The White House wants a new fiduciary rule - Fighting the Fiduciary Rule Before It's Been Even Proposed - When you get fired,...more

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