Breach of Fiduciary Duty

A breach of fiduciary duties occurs when the fiduciary fails in his/her obligations. This does not mean that every CEO or investment advisor who made bad choices or who gave inaccurate advice faces civil and criminal liability. The business judgment rule protects corporate executives and ensures they are not held responsible for decisions they made in the course of their work that turned out to be wrong.

When someone is accused of breaching a duty, the key question is whether the fiduciary was intending to benefit those to whom a duty was owed with the actions he/she took, or whether the fiduciary intentionally broke the trust relationship and acted on his/her own behalf.

If a fiduciary acted to enrich himself at the expense of the beneficiary, was purposefully dishonest in business practices, or otherwise did not live up to the duties of loyalty, candor, and disclosure, legal consequences can result.

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