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New York Based Breach of Fiduciary Duty Lawyers

Attorneys Protecting Investors’ Rights Nationwide

Financial advisors are required by federal law to act in the best interests of their clients. Thus, financial advisors can be held liable for breaching the fiduciary duty owed to their clients. If you suffered harm due to an investment professional’s breach of fiduciary duty, you should seek the counsel of a knowledgeable attorney.

What Is A Breach of Fiduciary Duty?

Breaches of fiduciary duty occur when someone or a group fails in their duty to act in the best interests of someone else (or group) specifically. As an example, a breach of fiduciary duty may have been performed if a member of a Board fails to uphold their duty to a company's shareholders. Litigation is common following breaches such as this. In these situations, a corporate lawyer can be of assistance. However, if the basics of the fiduciary duty held by particular individuals or members is better understood ahead of time, it can be extremely beneficial.

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Irwin Weltz Can Help Protect Your Rights

New York securities lawyer Irwin Weltz can analyze your accounts and assist you in determining whether you have sufficient evidence to bring a case against the party that caused your harm. He represents investors harmed by the fraud or negligence of brokers and financial advisors in litigation and arbitration in New York and throughout the nation. Irwin Weltz is well versed in the state and federal rules and laws that apply to financial services professionals and can provide you with aggressive representation.

Schedule a free initial consultation with qualified breach of fiduciary duty attorneys in New York at Weltz Law by completing our online form or dialing (877) 905-7671. We serve clients nationwide.

The Fiduciary Duty Owed by Financial Advisors

Financial advisors owe an ongoing fiduciary duty to their clients to act in the clients’ best interests. The duties imposed on a financial advisor are outlined in the regulations issued by the Securities Exchange Commission (SEC). Specifically, financial advisors owe their clients duties of loyalty, care, disclosure, and good faith. These duties have been interpreted to mean that a financial advisor must place a client’s interests above their own, and they must disclose any conflicts of interest.

Furthermore, financial advisors are required to disclose any relevant facts pertaining to a transaction and avoid misleading clients or providing investment advice that does not align with a client’s goals. Thus, it is essential for a financial advisor to make sure that an investor understands the risks and potential rewards of an investment, and to recommend transactions that will align with the investor’s objectives and needs.

Basic Fiduciary Duty Types

The benefit of shareholders should be the focus where the manner in which a board member conducts himself is concerned. This means that they are acting in a fiduciary capacity.

There are three primary types of fiduciary duty, which are as follows:

  • Duty of loyalty – The needs of the shareholders must be placed first by a board member. If a decision places a shareholder at a disadvantage, the board member should not make that decision. When making decisions that will impact shareholders, board members must act with morality, fairness, and in good faith.
  • Duty of good faith – When making decisions, board members must always act in good faith. That means not fraudulently sharing possibly harmful details with shareholders or concealing them.
  • Duty of care – When it comes to making financial investments, caution must be used when a board member acts. In the best interest of a shareholder, decisions must be made by the board member.

Most Common Fiduciary Duty Breach Types

Breaches can occur in several ways when board member's breach fiduciary duties to shareholders.

The two most common breach types are as follows:

  • Misappropriating business opportunities – If, before the needs of the shareholders, the individual needs of a member are placed in a business transaction, the decision should never be made by board members. This also means that, regarding potential business offers to shareholders, board members must fully disclose any and all details.
  • Engaging in "interested" transactions – Board members are tasked with protecting and managing shareholder assets. This means that board members should not be engaging in self-serving deals or "interested" transactions.

Fiduciary Duty Claim Elements

In breach of fiduciary claims, four elements must be satisfied. They are as follows:

  • Causation – This element establishes that, associated with a board member breach, damages were incurred by a plaintiff.
  • Damages – It must be established that, as a direct result of a breach, the shareholder experienced specific damages. There won't be any basis for case building if this element can't be shown.
  • Breach – The fiduciary duty must have been breached – or broken – by a board member. Frequently, self-serving decisions made by board members can be the cause for a fiduciary breach. Although, depending on the case, to establish a breach, exact required evidence varies.
  • Duty – This means that, between two parties, a duty must exist. As an example, to shareholders, a fiduciary duty is held by board members.

Proving a Breach of Fiduciary Duty

There are numerous ways in which a financial advisor in New York or elsewhere may breach the fiduciary duty owed to a client. Typically, any behavior that constitutes a failure to act in a client’s best interests may be considered a breach. In securities litigation and arbitration, breach of fiduciary duty claims typically arise due to a financial advisor’s misrepresentations:

  • pertaining to an investment
  • affecting the investor’s decisions regarding the investment
  • causing fraudulent or negligent actions

Even if a financial advisor’s inappropriate acts were not committed for personal gain, any act that fails to protect a client’s best interests may be considered a breach. If you are uncertain about whether your financial advisor breached the fiduciary duty owed to you, you should consult a capable securities attorney to discuss the facts of your case.

An investor who has been harmed by a financial advisor’s breach of a fiduciary duty may be able to pursue multiple claims against the advisor. For example, depending on the actions constituting the breach, an investor may be able to pursue a claim for fraud, misrepresentation, or negligence, in addition to a claim alleging a breach of a fiduciary duty. Each of these claims has somewhat different elements, so you should consult an attorney to determine which theory may be most applicable to your situation.

Discuss Your Situation with a Resourceful New York Breach of Fiduciary Duty Attorney

Financial advisors have specialized knowledge and skill, and they owe a fiduciary duty to their clients to exercise their knowledge and skill in a manner that benefits their clients’ interests. If you suffered harm due to your financial advisor’s breach of their fiduciary duty, you should contact a skilled securities litigation attorney to discuss your case.

At Weltz Law, we can be of assistance regarding the representation of someone who feels they have been the victim of fiduciary duty breach. Contact us for a free consultation in matters such as this and in reference to other financial legal concerns.

You can reach Weltz Law at (877) 905-7671 or through the online form to schedule a free consultation with a New York beach of fiduciary duty lawyer.


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