Tippee's Fiduciary Duty

The Court found that Cuban had not “misappropriated” any material non-public information because he had not violated a “legal duty to refrain from trading. Cuban had not promised that he would not trade after learning about a PIPE offering. The judge also said that the SEC failed to show that Cuban undertook a legal duty to not use the information he learned from those two phone calls with Mamma.com representatives. Mark Cuban did not have any fiduciary duty to not act upon the information. The Mamma.com CEO asked Cuban to keep their conversation confidential. However, that didn’t prove that Cuban had a legal duty to Mamma.com that would prohibit him from selling his shares based on what he was told. He just promised to not disclose the information to the others, not promised to not act upon what someone told him.

RULE OF LAW: Corporate promoters owe a fiduciary duty to one another, the company, its

A fiduciary duty is defined by the Wex Legal Dictionary as, “a legal duty to act solely in another party's interests” and goes on to elaborate that, “fiduciaries may not profit from their relationship with their principals unless they have the principals' express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries' other clients”. When Telemachus formed the Delta & Delta Realty Trust in August of 1971 with funds meant for Evanthea’s benefit, he breached his fiduciary duty, causing her injury. This pattern continued, as Telemachus proceeded to fraudulently transfer interest payments intended for Evanthea to the Delta & Delta Realty Trust, improperly enriching himself beginning January 2, 1973 and onward through to 1987, wrongfully redeeming shares of stock belonging to members of George’s surviving family for his own benefit, that of his family, to friends, and to his own business. In order to find these actions fraudulent, one must prove that there was an intentional misrepresentation of facts that were reasonably relied upon by the injured parties, which were the proximate cause of injury and damages. When Telemachus intentionally drew funds without the knowledge or consent of

In Australia, the doctor and patient relationship does not fall within an established category of fiduciary duty. The High Court in its decisions has been unwilling to alter equity’s principles in a manner that would allow fiduciary obligations to be imposed upon doctor and patient relationships. In order to understand the High Court’s unwillingness, this essay will examine and discuss the established categories of fiduciary relationships, fiduciary relations outside of the established categories and the nature of fiduciary obligations in terms of prohibitive (negative) and prescriptive (positive) duties and existing common law duties.

Firstly there is a significant Ethical and morale lapse in a share floated company when the CEO engages in related party transactions. The moral issues arise

In an attempt to downplay the extent to which corruption and fraud have penetrated to the heart of global capitalism, commentators have seized on the fact that many of Parmalat’s former top executives are related to claim that the scandal is simply a case of a “family firm” failing to adhere to good corporate governance practices. Not surprisingly, Parmalat’s top executives are going along with this story, insisting they were only acting “under orders” from the padrone. The scandal, however, has engulfed other major firms. There are the accounting firms—Grant Thornton and Deloitte and Touche, and the banks—Citicorp and Bank of America. Citicorp is directly linked to the $1.5

The company’s stakeholders include primary groups of customers, employees, shareholders, owners, suppliers, etc. and secondary groups of community. All stakeholders have their own self-interests. While employees want secure jobs with high earnings; customers want quality products with cheap prices, which may eventually result in the company and employees’ low income. Being said that, the corporation owes all stakeholders the obligations to meet their interests. That brings in the ethical issue of conflicts of interest, one of key problems at Enron. CFO Andrew Fastow created financial partnership to hide Enron debt, from which he allegedly collected $30 million in management fees. The action obviously made Enron financial data look good, but at the same time deceived the company’s investors about the real performance. Many investors may make their investing decisions based on those false data. And that’s when the collapse begins.

In the other meaning, fiduciary obligations cannot automatically be implied to constructive trustees and resulting trustees due to the trustees have not voluntarily taken the fiduciary obligations . However, there is an exception for the resulting trust where the trust arises because of a failure of an express trust, then the trustee would have regarded as a fiduciary and undertake the fiduciary obligations .

However, during the loan process the company failed to disclose key information about the company’s future earnings did the corporation and key leaders who were in charge not tell the truth of the real state of the company’s fiscal strength or was accounting dereliction involved. Leadership at Solyndra asked suppliers to permit it to put off cash payments to enrich the growth of the companies bottom line. This constitutes fraud by company officials, the investigation determined that the company officials distorted facts and left out key material in the efforts to get the loan. (Report, 2015). The consequences are extreme when fraud is in relationship with government loans, for instance, penalties imposed can be up to 30 years in Federal prison. The law, by distinction, is not satisfied to presume the good faith of company officials. It pursues any person that makes an effort to manipulate the issuance of government loans by presenting false statements with the goal to defraud the Government. The government guaranteed the loan, so when Solydra could no longer re-pay the onus was on the Government and the taxpayer to re-pay the half billion-dollar loan with interest. This reduces Solyndra’s risk knowing that the government, is on the hook to repay greatly lessening the chance that the loan will not be repaid. Apart from free market ethics, management would have instilled truthfulness, and integrity while carrying out their duties; this could have prevented the company from bankruptcy by upholding the spirit of the utilitarian rule that advocates for greater benefits to all.

The executives are accountable to the board of directors. Instead of protecting the investors, the board enticed the culture of financial fraud in the company for selfish gains. It failed in its duties in keeping the executives in check.

S.1043A “prohibits anyone in possession of non-public, price sensitive information from dealing in, or engaging others to deal in, the shares of a company” (text). After Patricia gained non-public, price sensitive information about SEPL’s intentions to buy a large amount of shares in FPPL, she immediately told her sister and engaged her in buying shares in

Records falsification was not the only illegal activity the Rigas family was wrapped up in. The family used company funds, unbeknownst to their investors, to finance personal endevours and interests. Examples include using corporate money to build a $12.8 million golf course on the Rigas property, using the company plane for personal vacation trips including a safari to Africa, and funding for two Manhattan apartments for his family (Markon, 2014). Not only this, but John Rigas purportedly used the company jet to fly a Christmas tree two times to his daughter in New York (Barlaup, 2009)! All of these incidents are just brief excerpts of the fraud and misuse of company funds that John Rigas and his family committed without any intention of ever paying back into the company. These actions, namely lying and stealing, prove to be the heart of the two moral issues that will be further analyzed.

If Virginia does owe Teddy a fiduciary duty, the onus of proof is on Teddy to show whether she has confidential information, whether that information is relevant to the new matter and whether it is reasonable for Teddy to conclude that there is a real risk that the information will be used to his detriment. Next, the onus shifts to whether information screening can appropriately protect the firm.

According to Milton Friedman, "stockholders are the owners of the corporation, and hence corporate profits belong to the stockholders. Managers…have a moral obligation to manage the firm in the interest of the stockholders" (Friedman 45). Adelphia was managed in such a way that it was not in the stockholder's interest, in fact, it was only managed in the interest of the Rigas family. It is wrong to harm the stockholders because they have entrusted the company with their money with an expected return and maybe an

Not all unethical actions committed in this situation can be corrected,  but policies could have been implemented by the firms to prevent them from happening. As a CFA holder, Sherman should have not solicited Pearl’s clients while he was employed at the firm. To correct this, he should first state the nature of the situation without bias to himself or either firm. He should