You may have learned that someone who you trusted took advantage of that trust, and it cost you money. When someone acts as a fiduciary, they owe you a very high duty, and they can be sued when they have violated their duty.
You need to learn what happened and get an attorney who can file a lawsuit on your behalf. As a nation-wide investment fraud law firm, Rikard & Protopapas has helped clients in a variety of situations when they have lost money to a fiduciary’s wrongful actions. Contact us today to discuss your case in a free initial consultation.
What Is a Fiduciary Duty?
A fiduciary relationship arises when one party places their trust in another, who then has the legal obligation to act in that party’s interest. In fact, the actual meaning of the word fiduciary is “trust” or “confidence.”
A fiduciary duty is rooted in agency law. When one is acting on behalf of another, they must not work to further their own interests. They must focus their efforts on the beneficiary, with an emphasis on the word “effort.”
A fiduciary duty is not an ordinary one. Because of the relationship of trust, the beneficiary relies on the fiduciary, and that the duty is the highest one. The principal is not in a position where they can act on behalf of themselves. They are relying on the fiduciary because they may not have the skill, information, or understanding necessary to complete the transaction. In other cases, the fiduciary was selected to be the person who acts.
Who May Owe a Fiduciary Duty?
A fiduciary relationship can arise because of a written agreement or based on the nature of the relationship. However, courts hesitate to imply a fiduciary relationship.
Some examples of situations where one may owe fiduciary duties are listed below:
- Agents who act on behalf of principles, such as stockbrokers and real estate agents
- Attorneys on behalf of their clients
- Executors on behalf of the heirs
- Trustees on behalf of the beneficiaries
- Employees when they are working for their employer
Investment advisers who act on your behalf owe you a fiduciary duty. If a broker has discretionary trading authority in your account, they would similarly owe you a fiduciary duty.
Generally, stock brokers who do not have discretionary trading authority are not considered to be fiduciaries. Instead, they must follow the suitability rule when recommending investments for a client.
What Does a Fiduciary Duty Mean?
When one owes a fiduciary duty to another, it means the following:
- They owe a duty of care that obligates them to be informed, so they can exercise sound judgment. This requires the fiduciary to perform due diligence and not be negligent.
- They owe the duty of loyalty that requires them to place the beneficiary’s interests over theirs at all times. They should avoid conflicts of interest, or make sure that they are disclosed to the beneficiary, which allows the beneficiary to make a decision based on the facts.
- They owe a duty to maintain the beneficiary’s confidentiality.
- An agent fails to follow the principal’s instructions when executing a transaction.
Examples of actions that may be a breach of fiduciary duties include:
- An investment adviser recommends a stock that they did not research beforehand.
- A real estate agent buys a home from you for below market value for a related entity, without disclosing the conflict to you.
- The trustee steers business from the trust to itself.
- Recommending an unsuitable investment or product that enriches the adviser but not his customer
If the fiduciary has breached their obligations to you, they can be held liable in a lawsuit. They can be personally responsible for paying the damages out of their pocket if you can prove your case.
In order to win a breach of fiduciary duty lawsuit, you would need to prove the following elements:
- The defendant owed you a fiduciary duty.
- They committed a breach of the fiduciary duty.
- You suffered a financial loss.
- Your loss was caused by the defendant’s breach of fiduciary duty.
Breach of fiduciary duty lawsuits are often fact-intensive, and they require you to gather proof that shows that the fiduciary did something wrong. You need to know exactly what happened, which can be hard to learn when the fiduciary is trying to cover their own tracks.
Statutes of Limitations in Breach of Fiduciary Duty Cases
Breach of fiduciary actions rely on state law. Therefore, the statute of limitations in the state applies to a breach of fiduciary lawsuit.
The challenge is to know when the time clock begins to run because it starts when you knew or should have known of your cause of action. You may not have known what was happening initially because the fiduciary could have taken steps to hide what they did.
This statute of limitations may not be the same one that applies in a personal injury case. The statute of limitations is different in each state. For example, in South Carolina, the statute of limitations is three years after the breach of fiduciary duty occurred, or when you knew it occurred.
How We Can Help
Since breach of fiduciary duty lawsuits can be complex, you need an attorney to have the best chance of winning. When you hire the lawyers at Rikard & Protopapas, we can do the following for your case:
- Investigate your case and review the evidence
- Work with experts to identify your damages
- File a lawsuit against the fiduciary on your behalf
- Represent you throughout the court proceedings, including gathering evidence in the discovery phase
- Negotiate a potential settlement of your lawsuit
Contact a Breach of Fiduciary Duty Lawyer Today
If you suspect that you have suffered damages from something that a fiduciary did, you may be entitled to financial compensation. Take the first step in filing a lawsuit against the fiduciary. The attorneys at Rikard & Protopapas can help. Schedule your free initial consultation to discuss your case. You can call us at (803)-805-7546 or send a message through our website to schedule an appointment with a lawyer.