There are few business disputes more frustrating than when a fiduciary acts in their own best interests rather than those of a company or a client. The fiduciary can be a corporate officer, salesperson, investment counselor, trustee, accountant, or other professional. Their self-dealing is a conflict of interest and may lead to termination, financial penalties or litigation. Their self-dealing benefits can be direct or indirect.
The plaintiff and legal team must prove the existence of fiduciary duty and that the plaintiff’s interests were damaged by the self-dealing. A fiduciary’s self-dealing comes in many forms:
- When they use a company’s assets for personal and professional gain
- When they take a foundation’s or non-profit’s funds for personal use
- When they use a company’s proprietary information to enrich themselves through the purchase or sale of stocks
- When a financial advisor’s advice suits their interests but not those of the client
- When an advisor knowingly omits relevant facts to their clients
- When making an excessive number of stock trades to raise commissions
Proving it in court
It is important to trust but confirm all business relationships that involve finances. This ensures there are no instances of self-dealing that cost the client money or prevented them from reaching their financial or business goals.
Each state will have different guidelines for the burden of proof. Regardless of the guidelines and the details of the case, a knowledgeable attorney with experience handling fiduciary duty issues like self-dealing can be vital in holding the defendant accountable in a court of law.