A fiduciary can be an investment banker for a company, an advisor, director, or any other individual with access to the finances of a business. The nature of their position allows fiduciaries an unprecedented knowledge and control which, misused, can constitute fraud. They are expected to act in good faith; a breach of duty can cause considerable loss to your business, for which you will need the assistance of a Woburn business attorney.
Types of Breach
The sensitive nature of a fiduciary’s position means that the individual has a high obligation, or duty, to act honestly. A breach of this duty may take different forms, one of which is constructive fraud. While not constituting legal fraud, constructive fraud occurs when an individual conceals or omits information which tends to put him at a personal advantage at the expense of the company.
Another type of breach is insider trading. When a company’s stock is likely to be significantly affected by an action or announcement not yet made public, a fiduciary commits insider trading by either passing along that information to an outsider or taking some action that will lead to improper personal gain.
Other types of breach exist, but in any event if you or your company falls victim you need to hire a Woburn business attorney right away.
Numerous potential remedies for such a breach are possible. An account of profits can be made, by which an accounting of money fraudulently obtained is made and the illegal profits withheld. Accounts of profits can prove difficult, in which case a business may seek compensatory damages. Note that remedies can be of both a civil and criminal nature. Criminal charges can be brought, for instance, against a fiduciary who commits insider trading.
If you need legal assistance for a breach of fiduciary duty matter, call Woburn business attorney David Ionson for a consultation. The number is (781) 674-2562.