Fiduciaries hold positions of trust to others. A fiduciary duty is a legal responsibility to act with integrity and to put the interests of specified others before an interest to yourself.
Trustees have a fiduciary duty to beneficiaries, lawyers have a fiduciary duty to their clients, and corporate boards of directors and certain officers have a fiduciary duty to the shareholders. When they fail to disclose information about their business, and shareholders lose money as a result, they frequently have breached their fiduciary duty.
Investors who have been harmed by omissions or other misleading statements can sue corporate officers for breaching their fiduciary duty. You deserve justice if this has happened to you, so contact a securities fraud class action attorney from the Silver Law Group and learn how a breach of fiduciary duty affects your securities fraud case.
Corporate fiduciaries must work for the benefit of the corporation and its shareholders. When their own interests’ conflict with that of the company or its shareholders, the common law requires them to act in the company’s interests.
Corporate officers and directors cannot take personal advantage of business opportunities that belong to the corporation. Doing so is known as self-dealing. In addition, corporate officers and directors must disclose any conflicts of interest and may need to recuse themselves from certain business decisions.
Directors and officers who violate their fiduciary duty are liable to shareholders who were defrauded. A securities fraud lawsuit can claim the breach of fiduciary duty as one of the bases for compensation in a class action lawsuit aggressively spearheaded by the team at Silver Law Group.
Members of the board and corporate officers control the way a company manages its business. They have access to private information and cannot use that information for personal gain. When making management decisions, their focus must be the success of the company and the profits of the shareholders.
There are many ways a corporate officer or director could breach their fiduciary duty besides self-dealing, such as omitting accurate business financials, misrepresentation of reports, accounting fraud, or knowingly steering people into investments that are unsound.
A securities fraud attorney from Silver Law Group can evaluate a specific situation to determine whether the violations of fiduciary duty caused actual harm to multiple shareholders. If so, a class action lawsuit will seek compensation from the liable fiduciaries.
Corporate officers have an obligation to use their best business judgment when making decisions for the corporation. When they gain personally by those decisions at the expense of investors, including by hiding any negative information about the business, a breach of fiduciary duty may have occurred.
However, there are times where a decision that does not profit the corporation or benefit shareholders is not the result of misconduct or malfeasance. Corporate officers are not liable when a decision made in good faith and using the information available at the time turns out to simply be a poor business mistake.
Defendants in breach of fiduciary duty lawsuits often cite the business judgment rule in their defense. Our team will rigorously investigate and present proof of manipulation, misleading public statements, self-dealing, and other malfeasance to overcome this defense.
Shareholders suffer when corporate officers and board members do not act with the utmost integrity. Unfortunately, competition and the prevailing culture in many corporations encourages wrongdoing that can cause losses in the securities market – often affecting many people at once.
Work with Scott Silver, a highly experienced attorney with a strong record of success proving breach of fiduciary duty in securities fraud cases. We represent clients all over the country, so get in touch today and learn if you can take part in a class action claim to recover what you are owed.