News & Analysis as of

Fiduciary Duty

SEC Proposes Rules Addressing Broker-Dealer and Investment Adviser Standards of Conduct

by Dechert LLP on

On April 18, 2018, the U.S. Securities and Exchange Commission (SEC) voted 4-1 to propose a package of rules and interpretations (Proposals) intended to improve the retail investor experience and to provide greater clarity...more

Bankruptcy Remoteness Going to a Court of Appeals (Progress Report No. 2)

Our February 22 post reported that the Franchise Services of North America, Inc. decision of Bankruptcy Judge Edward Ellington of the Southern District of Mississippi dismissing a Chapter 11 petition because a shareholder had...more

Fifth Circuit Opinion Vacates DOL Fiduciary Rule

by Dechert LLP on

The U.S. Court of Appeals for the Fifth Circuit on March 15, 2018 issued an opinion (Opinion) vacating the Department of Labor (DOL) fiduciary rule and related applicable exemptions. The DOL had promulgated the rule and...more

UK Authority Considers Competition Issues Arising From the Provision of Investment Consultancy Services and Fiduciary Management...

by Shearman & Sterling LLP on

The U.K. Competition and Markets Authority has published the third in a series of working papers on specific aspects of its market investigation into the supply and acquisition of investment consultancy services and fiduciary...more

Home Depot is the next 401(k) lawsuit target

by Ary Rosenbaum on

The company that told us we can do home improvement by ourselves might not have been able to properly run their 401(k) plan. Home Depot is now the target of a $140 million class-action lawsuit that was filed in the U.S....more

Farmout Agreement Worked Over By The Court

by Gray Reed & McGraw on

What could go wrong when the well recovers two times its costs in nine months? Plenty, as we see in Dimock v. Sutherland Energy....more

Magistrate Recommends Denying A Motion To Dismiss Against A Bank For Aiding and Abetting Breach Of Fiduciary Duty

by Winstead PC on

In Schmidt v. JP Morgan Chase Bank, N.A., the plaintiff’s employee opened credit cards in the employer’s name, used those credit cards for the employee’s own personal use, and paid those credit card bills with funds from the...more

Court Affirmed Summary Judgment For A Trustee Due To An Exculpatory Clause

by Winstead PC on

In Kohlhausen v. Baxendale, the court affirmed a summary judgment for a trustee on the basis of an exculpatory clause in a trust document. No. 01-15-00901-CV, 2018 Tex. App. LEXIS 1828 (Tex. App.—Houston [1st Dist.] March 13,...more

Delaware Chancery Court Finds Elon Musk May Be Controlling Stockholder of Tesla Motors

On March 28, 2018, in In re Tesla Motors, Inc. Stockholder Litigation, the Delaware Court of Chancery denied a motion to dismiss a lawsuit brought by stockholders of Tesla Motors, Inc. (“Tesla” or the “Company”)....more

Enforcement of DOL’s New Best Interest Contract Exemption’s Anti-Arbitration Condition is Enjoined

by Carlton Fields on

A number of lawsuits have been brought challenging aspects of the United States Department of Labor’s "fiduciary rule," which expanded the definition of "fiduciary" of an employee benefit plan or individual retirement account...more

State Suitability, Fiduciary Duty and Disclosure Initiatives Roundup

by Carlton Fields on

States are stampeding to impose additional duties on those who provide financial advice or make recommendations to consumers. Some of these initiatives result from the states’ belief that action is required to wrangle...more

Financial Conflict Of Interest In The Eighth Circuit: Trigger Of A Less Deferential Standard Of Review Or Mere Factor In...

by Jackson Lewis P.C. on

It is well-established under the Employee Retirement Income Security Act of 1974 (“ERISA”) that when an employee benefit plan grants the plan administrator discretion to decide questions of eligibility for benefits or to...more

Fifth Circuit Court of Appeals Invalidates the 2016 Final Department of Labor Fiduciary Rule and Related Prohibited Transaction...

What’s a financial advisor to do? On March 15, 2018, the Fifth Circuit Court of Appeals in Chamber of Commerce of the U.S. v. U.S. Dep’t. of Labor, No. 17-10238, 2018 U.S. App. LEXIS 6472 (5th Cir. Mar. 15, 2018) vacated –...more

The Future of the ERISA Fiduciary Rule

The future of the Department of Labor’s Fiduciary rule is in limbo following the Fifth Circuit’s decision striking it down “in toto.” The future of the Fiduciary rule is uncertain, particularly in light of the Fifth...more

ERISA Newsletter - First Quarter 2018

by Proskauer Rose LLP on

Despite the change in seasons, there appears to be no change in the pace of complex and class action ERISA litigation. Investments in defined contribution plans—both 401(k) and 403(b) plans—continue to be the leading target...more

Retirement Plans: The Fiduciary Landscape and Best Practices to Avoid Liability for Plan Investments

by Steptoe & Johnson PLLC on

The landscape surrounding retirement plans maintained by institutions of higher education has been changing in recent years, although certain critical responsibilities that are imposed on plan sponsors have been in place...more

Fifth Circuit Overturns Department of Labor Fiduciary Rule

by Goodwin on

On March 15, 2018, in Chamber of Com. of the U.S. v. U.S. Dep’t. of Labor (No. 17-10238, 5th Cir. Mar. 15, 2018), the Fifth Circuit entered an order enjoining enforcement of the Department of Labor’s (DOL) fiduciary rule...more

Court Enforced Forum-Selection Clause In Trust Document

by Winstead PC on

In In re JP Morgan Chase Bank, N.A., trust beneficiaries sued the trustee for alleged breaches of fiduciary duty in Dallas, Texas. No. 05-17-01174-CV, 2018 Tex. App. LEXIS 1883 (Tex. App.—Dallas March 14, 2018, original...more

Shareholder Oppression Requires More Than Denial of Access to Company Information

by Farrell Fritz, P.C. on

The family-owned business at the center of Vaccari v Vaccari, 2018 NY Slip Op 30546(U) [Sup Ct NY County Mar. 28, 2018], decided last month by veteran Manhattan Commercial Division Justice Eileen Bransten, is a classic...more

Fifth Circuit Vacates DOL Fiduciary Rule

by Carlton Fields on

On March 15, the Fifth Circuit, in Chamber of Commerce, et. al. v. United States Department of Labor, a 46-page opinion, reversed the district court’s ruling upholding the Department of Labor (DOL) fiduciary rule and vacated...more

The Ninth Circuit Reconfirms that under California Law an Insurer Bears a Heavy Burden to Demonstrate an Exclusion Eviscerates Its...

by Blank Rome LLP on

Under California law, the insurer has the heavy burden of establishing there is no potential for coverage of an underlying claim. With respect to the duty to defend, “[t]o prevail, the insured must prove the existence of a...more

Lessons Learned from Recent SEC and FINRA Cases for April 2018

If it walks like a duck, swims like a duck, and quacks like a duck…. Then it just may be a duck. The SEC censured and fined Financial Fiduciaries, LLC, a SEC registered investment advisor and Thomas Batterman for violating...more

Court Of Chancery Addresses Conflicted Transaction And Secondary Liability

by Morris James LLP on

RCS Creditor Trust v. Schorsch, C.A. No. 2017-178-SG (Del. Ch. Apr. 5, 2018) - This is an interesting decision for two reasons. First, it distinguishes between classic self-dealing claims and tag-along challenges to...more

2018 resolution: conduct ERISA fiduciary training

by Thompson Coburn LLP on

Retirement plans are one of the most important benefits provided by employers to employees, second only, perhaps, to medical benefits. For many employees, retirement plan benefits represent a key element of their long-term...more

Blue Man Group Member’s Fiduciary Duty Claim Drummed Out of Court

by Farrell Fritz, P.C. on

Ian Pai was an early participant in the Blue Man Group (“BMG”). Between 1989 and 1991, he met and began collaborating with the founders of BMG, namely, Chris Wink, Phillip Stanton and Matt Goldman. ...more

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