In business relationships and entities of all kinds, certain individuals are expected to act as fiduciaries. A fiduciary is a person who is supposed to act in the organization or individual’s best interests, and when they fail in that duty, legal action can be taken against them.

There are as many examples of breach of fiduciary duty as there are situations where someone has been assigned that responsibility. Here are some common examples:

• Self-dealing. This describes a situation where the fiduciary makes decisions that benefit themselves and are in conflict with the best interests of the person or organization that they are supposed to be working on behalf of.
• Competing with a business. This is similar to self-dealing. A fiduciary is expected to avoid situations where they are competing with the organization to which they owe fiduciary responsibilities unless they have explicit permission to do so.
• Misuse of assets. A fiduciary often has access to an individual or business assets. If they embezzle or misuse funds for themselves, it represents a significant breach of duty and may represent fraud or theft.
• Failure to disclose. Fiduciaries are obligated to provide stakeholders with all information about themselves or their business dealings that are relevant to the business.
• Trading on insider information. Fiduciaries often have access to information about an organization’s inner dealings. They are not permitted to act on that information for personal gain or to provide it to others.
• Failure to exercise due diligence. Fiduciaries are often tasked to manage an organization or individual’s finances or business dealings. If, whether through negligence or incompetence, they fail to conduct a proper investigation and end up recommending or allowing something that causes financial harm, it represents a breach.
• Failure to act in good faith. Fiduciaries are trusted, and if they act in a way that breaches that trust, whether through bad intent or for personal gain, it is considered a breach.
• Failure to provide adequate oversight. If a fiduciary is tasked with supervising employees and their failure to do so leads to harm to the business, it may be viewed as a breach.
• Bypassing corporate policies. Every corporation has established policies that need to be followed by its fiduciary. If they intentionally bypass or violate those policies out of self-interest, that can represent a breach of fiduciary duty.

Different organizations are vulnerable to different types of fiduciary breaches, but every type can cause harm. If you need information about a specific situation, contact our experienced attorneys today.