A fiduciary responsibility is a legal or ethical relationship of confidence or trust between two or more parties, most commonly a fiduciary and a principal. One party, for example a corporate trust company or the trust department of a bank, holds a fiduciary relation or acts in a fiduciary capacity to another, such as one whose funds are entrusted to it for investment. In a fiduciary relation one person, in a position of vulnerability, justifiably reposes confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests. A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.[1]
A fiduciary duty[1] is the highest standard of care at either equity or law. A fiduciary (abbreviation fid) is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The word itself comes originally from the Latin fides, meaning faith, and fiducia, trust.
Securities Non-suitable investments, broker/agent fraud, misrepresentation broker has a duty to understand the investor's risk tolerance. In making an investment recommendation to a client, a broker must make recommendations that are consistent with the customer's risk tolerance, needs and investment objectives. A broker has a duty to know his client and only recommend investments and trading strategies that are suitable for that client. An investment may be unsuitable if a customer does not have the financial ability to incur the risk associated with a particular investment, or if the investment was not in line with the investor's financial needs; or if the customer did not know or understand risks associated with certain investments.
A broker has a duty to understand the risk tolerance of an investor, the tax considerations for the client, the client's prior experiences and appetite for risk, and the level of return desired. It is the duty of a broker to make recommendations that are appropriate and suitable given his client's circumstances. If a broker breaches those duties and makes unsuitable recommendations for a client, the broker may be liable to that client.
Fraud and Misrepresentation To constitute fraud the misrepresentation [or omission] must be made knowingly and intentionally, not as a result of mistake or accident; that is, that the person either knew or should have known of the falsity of the misrepresentation [or the false effect of the omission], or that he made the misrepresentation [or omission] in negligent disregard of its truth or falsity. The Plaintiff must prove that the Defendant intended for the Plaintiff to rely upon the misrepresentation [and/or omission]; that the Plaintiff did in fact rely upon the misrepresentation [and/or omission]; and that the Plaintiff suffered injury or damage as a result of the fraud.
1. Fraud, dolus malus, may be actual, arising from facts and circumstances of imposition, which is the plainest case;
2. It may be apparent from the intrinsic nature and subject of the bargain itself; such as no man in his senses and not under delusion, would make on the one hand and such as no honest and fair man would accept on the other, which are inequitable and unconscientious bargains;
3. Fraud, which may be presumed from the circumstances and condition of the parties contracting;
Intentional Torts Defamation, libel, slander, tortious interference with contract, tortious interference with prospective business relations.
Intentional Torts Defamation, libel, slander, tortious interference with contract, tortious interference with prospective business relations. INTENTIONAL INTERFERENCE TORTS WITH PROSPECTIVE ECONOMIC ADVANTAGE Nature of the Tort of Intentional Interference with Prospective Economic Advantage The elements of that tort of are: '(1) an economic relationship between [the plaintiff and some third person] containing the probability of future economic benefit to the [plaintiff],
(2) knowledge by the defendant of the existence of the relationship,
(3) intentional acts on the part of the defendant designed to disrupt the
relationship,
(4) actual disruption of the relationship, [and]
(5) damages to the plaintiff proximately caused by the acts of the defendant.
Laws Board of Realtors Standard Practices and Codes
Article 1
When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS of their obligation to treat all parties honestly. When serving
a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS remain obligated to treat all parties honestly.
(Amended 1/01)
Standard of Practice 1-9
The obligation of REALTORS to preserve confidential information (as defined by state law provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any nonagency relationships recognized by law. REALTORS shall not knowingly, during or following the termination of professional relationships with their clients:
1) reveal confidential information of clients; or
2) use confidential information of clients to the disadvantage of clients; or
3) use confidential information of clients for the REALTORs advantage or the advantage of third parties unless:
a) clients consent after full disclosure; or
b) REALTORS are required by court order; or
c) it is the intention of a client to commit a crime and the information is necessary to prevent the crime; or
d) it is necessary to defend a REALTOR or the REALTORs employees or associates against an accusation of wrongful conduct.
Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended 1/01)
Article 2
REALTORS shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to disclose facts which are confidential under the scope of agency or non-agency relationships as defined by state law. (Amended 1/00)
Standard of Practice 2-1
REALTORS shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. Article 2 does not impose upon the REALTOR the obligation of expertise in other professional or technical disciplines. (Amended 1/96
Article 12
REALTORS shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional.
(Amended 1/08)