Robo-Advisors - Market Impact and Fiduciary Duty of Care to Retail Investors

2020 ◽  
Author(s):  
Demo Clarke
Keyword(s):  
Fiduciary Duty ◽  
Duty Of Care ◽  
Market Impact ◽  
Retail Investors

Fiduciary Principles in Investment Advice

2019 ◽  
pp. 144-165
Author(s):  
Arthur B. Laby
Keyword(s):  
Fiduciary Duty ◽  
Duty Of Care ◽  
Complex Nature ◽  
State Law ◽  
Fiduciary Duties ◽  
Legal Obligations ◽  
Standards Of Conduct ◽  
Investment Advisers ◽  
Definition Of ◽  
Investment Advice

This chapter examines the fiduciary principles governing investment advice. Fiduciary principles in investment advice are both straightforward and complex. They are straightforward because most investment advisers are considered fiduciaries and subject to strict fiduciary duties under federal and state law. Their complex nature arises from the fact that many individuals and firms provide investment advice but are not deemed investment advisers and, therefore, are not subject to a fiduciary obligation. This chapter first explains whether and when an advisory relationship gives rise to fiduciary duties by focusing on both federal and state law, as well as the individuals and firms that typically provide investment advice. In particular, it looks at certain persons and entities excluded from the definition of investment adviser and thus not subject to the Investment Advisers Act of 1940, namely broker-dealers, banks, and family offices as well as accountants, lawyers, teachers, and engineers. The chapter also considers fiduciaries under ERISA, the Investment Company Act, and the Commodity Exchange Act before discussing the fiduciary duty of loyalty and how it is expressed and applied in investment advisory relationships; the fiduciary duty of care and how it differs from other standards of conduct, such as a duty of suitability; and other legal obligations imposed on investment advisers and how those obligations relate to an adviser’s fiduciary duty. Finally, the mandatory or default terms with regard to an investment adviser’s fiduciary duties are explored, along with remedies available for breach of fiduciary duty.

Fiduciary Principles in Corporate Law

2019 ◽  
pp. 60-78
Author(s):  
Julian Velasco
Keyword(s):  
Voting Rights ◽  
Corporate Law ◽  
Fiduciary Duty ◽  
Duty Of Care ◽  
Profit Motive ◽  
Fiduciary Duties ◽  
Common Misconception ◽  
Strict Enforcement ◽  
Default Rules ◽  
Moral Requirements

This chapter examines fiduciary duty in corporate law. Fiduciary duty is pervasive as well as all encompassing in corporate law. One common misconception about fiduciary duty in corporate law is that it is merely aspirational. Fiduciary duties are not simply moral requirements, they are legal ones. They are not merely suggestions, they represent the demands of the law. Although corporate law has often compromised rather than insisting upon strict enforcement of fiduciary law principles, these compromises are due to practical considerations that are entirely consistent with the goals of fiduciary law. In corporate law, general fiduciary law principles are balanced with practical considerations concerning the profit motive in order to achieve the best overall result for the shareholders. Understanding this tension between ambition and practicality is key to understanding fiduciary duty in corporate law. This chapter first considers the triggers for fiduciary duty in corporate law before discussing the role that the duty of loyalty plays in corporate law. It then explores the duty of care in corporate law, along with other fiduciary duties such as good faith, takeover situations and contests for control, shareholder voting rights, and the duty to monitor and the duty to disclose. The chapter proceeds by analyzing mandatory and default rules regarding the extent to which fiduciary duties can be waived in corporate law and concludes with an overview of remedies for breach of fiduciary duty.

Fiduciary Principles in Contemporary Common Law Systems

2019 ◽  
pp. 564-582
Author(s):  
Matthew Conaglen
Keyword(s):  
United States ◽  
Common Law ◽  
The United States ◽  
Good Faith ◽  
Fiduciary Duty ◽  
Standards Of Care ◽  
Duty Of Care ◽  
Fiduciary Duties ◽  
Similarities And Differences ◽  
Fiduciary Relationships

This chapter examines the principles of fiduciary doctrine that are found in contemporary common law systems. More specifically, it considers the current similarities and differences between various jurisdictions such as England, Australia, Canada, and the United States. The similarities focus on the duties of loyalty, care and skill, and good faith, as well as when fiduciary duties arise and the kinds of interests that are protected by recognition of fiduciary relationships. The chapter also discusses the issue of differences between various jurisdictions with regard to the duty of care and skill before concluding with an analysis of differences between remedies that are made available in the various contemporary common law jurisdictions when a breach of fiduciary duty arises. It shows that the regulation of fiduciaries appears to be reasonably consistent across common law jurisdictions and across various types of actors, even as such actors are expected to meet differing standards of care. Statute plays a key role in the regulation of various kinds of fiduciary actors, especially corporate directors.

Shaping and Re-shaping the Duty of Loyalty in Japanese Law

2019 ◽  
Vol 14 (S1) ◽  
pp. S119-S146
Author(s):  
Eriko TAOKA
Keyword(s):  
Fiduciary Duty ◽  
Duty Of Care ◽  
Fundamental Nature ◽  
Duty Of Loyalty ◽  
Japanese Law ◽  
The Relationship ◽  
Conceptual Relationship ◽  
Corporate Trust

AbstractThe duty of loyalty has been notoriously vague since its introduction into Japanese law. The vagueness of the duty becomes particularly problematic because although the duty overlaps with the duty of care, a breach of each of the duties is subject to different remedial rules. By focusing primarily on duties owed by a trustee and agent, this article attempts to re-define the duty of loyalty and clarify the conceptual relationship between the duties of loyalty and care in Japanese law. The article first explains the current complexity in the scope and nature of the duty of loyalty, and the relationship between the duties of loyalty and care in corporate, trust, and agency laws in Japan. Second, borrowing ideas from Lionel Smith's account of the fundamental nature of the fiduciary duty, this article attempts to re-shape the concept of the duty of loyalty while properly differentiating it from the duty of care in Japanese law.

7 Governance Issues in Offshore Companies Used as Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Board Of Directors ◽  
Private Investment ◽  
The United States ◽  
Fiduciary Duty ◽  
Duty Of Care ◽  
Cayman Islands ◽  
Investment Funds ◽  
The Board Of Directors ◽  
The Uk

This chapter examines issues of governance arising from the use of offshore companies as private investment funds. Funds established in offshore jurisdictions are often structured as limited companies that issue shares to investors. Governance issues can arise in offshore companies when voting rights are separated from economic participation. The chapter first considers the role of the board of directors in private investment funds before discussing taxation issues affecting offshore companies used as private investment funds in the UK and in the United States. It then explains the duties of directors under Cayman Islands law, including fiduciary duty, duty of care, diligence, and skill, and duty of confidentiality. It also describes the composition of the board of directors, its meetings, relationship with the fund manager, and responsibility for approval of fund documentation.

4 The Legal Duties Arising from the Provision of Investment Advisory and Management Services

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Private Investment ◽  
Fiduciary Duty ◽  
Duty Of Care ◽  
Fund Manager ◽  
Investment Funds ◽  
Fund Managers ◽  
Legal Relationship ◽  
Legal Structures ◽  
The Impact ◽  
Management Services

This chapter discusses the legal duties owed by investment managers to their clients arising from the provision of investment advisory and management services. It first considers the key documents that establish the legal relationship between fund managers and investors before explaining the investment manager’s duty of care and fiduciary duty of loyalty to the client. It then examines the contracts involved in private investment funds between the fund vehicle and the fund manager, along with the fiduciary duties of directors of limited companies. It also analyses the impact of structure of investment management firms on legal duties, taking into account multiple management vehicles, the effect of fund management economics on legal structures, and the dividing line between fund manager and investors.

Fiduciary Principles in Health Care

2019 ◽  
pp. 285-302
Author(s):  
Mark A. Hall
Keyword(s):  
Health Care ◽  
Fiduciary Duty ◽  
Duty Of Care ◽  
Private Hospitals ◽  
Full Disclosure ◽  
Legal Decisions ◽  
Health Care Law ◽  
Physician Patient ◽  
Decisional Authority ◽  
Unanimous Agreement

This chapter examines fiduciary principles in health care law. There is no unanimous agreement when it comes to the precise doctrinal consequences of labeling health care actors as fiduciaries in various contexts, such as personal injury, decisional authority, financial influence, and procedural rules. In the case of patients and physicians, certain attributes are said to constitute an archetypal fiduciary relationship, including agency, dependency, trust, and information asymmetry. Thus, many legal decisions and commentators argue that physicians have fiduciary responsibilities to patients. For courts, however, hospitals are not fiduciaries. They regard private hospitals as ordinary commercial enterprises. This chapter first provides an overview of arguments over whether physicians and non-physicians (for example, hospitals and health insurers) are “fiduciaries” before discussing health care fiduciaries’ duty of loyalty and duty of care, along with their other obligations such as duties of confidentiality and full disclosure. It also explores the ability of health care fiduciaries and patients to waive fiduciary duties, as well as how courts have addressed distinct causes of action for physicians’ breach of fiduciary duty. It shows that courts often invoke fiduciary concepts and terminology in discussing physicians’ obligations to patients, and that physician-patient (and other medical treatment) relationships have classic attributes of fiduciary status.

Fiduciary Principles in Legal Representation

2019 ◽  
pp. 263-285
Author(s):  
Richard W. Painter
Keyword(s):  
Conflicts Of Interest ◽  
Common Law ◽  
Fiduciary Duty ◽  
Professional Responsibility ◽  
Duty Of Care ◽  
Fiduciary Duties ◽  
Legal Representation ◽  
Mandatory Rules ◽  
The Subject ◽  
The Relationship

This chapter examines the fiduciary duties of lawyers, and especially how such duties shape—and are shaped by—their other professional responsibilities. It begins with a discussion of the legal basis of lawyers’ fiduciary duties as well as the circumstances that trigger a lawyer-client fiduciary relationship. It then considers the lawyers’ fiduciary duty of loyalty, focusing on the duty to avoid conflicts of interest, the duty of confidentiality owed by a lawyer to a client, the duty of candor, and the duty to communicate to the client information that the latter needs to make informed decisions about the subject matter of the representation. It also explores the lawyer’s fiduciary duty of care, including the duty to familiarize himself with the client’s affairs and to safeguard confidential information; the relationship between fiduciary duties and other duties of professional responsibility; cases where lawyers are subject to the specific duties of a common law trustee; and two types of mandatory rules to which lawyers, as professional fiduciaries, are subject and that cannot be waived with client consent: mandatory rules of professional responsibility and generally applicable laws. The chapter concludes with an analysis of remedies available when a lawyer commits a breach of fiduciary duty, along with the unique challenges faced by lawyers when they also become trustees for their clients or third persons.

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