Tag Archives: breach of fiduciary duty

More Selective Statutory Interpretation By The United States Supreme Court

One of the nice things about the being a Justice of the United States Supreme Court is that you never have to explain yourself. You don't have to ask questions at oral argument. You don't have to read the briefs filed by the parties, not really, because you can interpret the facts stated and arguments raised however you want. You certainly don't have to be consistent across your own opinions. In one case, you can make an argument inconsistent with the argument you made in another case. Few people will notice and, worse, fewer will care, because caring about the ... Continue Reading

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Preventing Investment Fraud, From New World Silver To Goldman Sachs

Although the big financial meltdown began around 2007, financial fraud lawsuits are still all the rage among trial lawyers these days. It usually takes a couple months for an investor to realize they’ve been swindled by a bank and a couple years for the lawsuits to be investigated, filed, litigated, and then sent to trial.  I’ve written before here that banks have only minimal fiduciary duties to depositors, but they do have some duties to their clients. Chief among those duties: the bank can’t steal from its own clients. Yet, it happens, and happens a lot. Sometimes the banks just ... Continue Reading

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Good Lawyers (And Doctors) Aren’t Cheap Because They Can’t Do Piecemeal Work

Fred Wilson, the always inspiring venture capitalist, posted yesterday A Challenge To Startup Lawyers: We closed an investment recently. It was a seed round. Our firm priced the round and we were joined by a number of small VCs and a few well known angels. We agreed to close on a standard set of "light preferred" documents without negotiation. There was no investor counsel on the transaction. We just signed the standard documents which were tweaked to reflect the round size, share price, and board provision in the term sheet. The legal fees for this transaction were $17,000. I talked ... Continue Reading

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The Big Short Lawsuit: Subprime CDO Manager Takes A Calculated Legal Risk In Suing Michael Lewis

As I have written many times before on this blog, and as I know from my own experience, defamation lawsuits against major media outlets are no joke. Defamation law across the United States has been mostly settled for the past generation, and so most newspapers, television stations, publishing houses, and film production companies have editors and lawyers who know how to make sure they have just enough support for their allegations to fend off a defamation lawsuit. In my own cases, I have seen examples where a media outlet, in the course of "fact-checking" and editing an article, we will ... Continue Reading

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Alas, National Banks Have Virtually No Fiduciary Duties To Depositors And Are Almost Impossible To Sue

I've sued several multinational banks for breaches of fiduciary duty and breaches of contract, and have always been amazed their lack of any accountability or responsibility. It's not just a handful of instances of banks selling a company's loan to their competitor and bank lawyers lying to federal regulators. They live in a different world from you and I. In one of my cases, a bank fired a financial adviser because he was covering his gambling losses by stealing from clients. All well and good, until the bank covered up the whole mess and didn't tell any of his clients ... Continue Reading

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The New Wave Of Breach Of Fiduciary Duty Forum-Shopping By Corporate Boards of Directors

[UPDATE: In related news, a federal judge in San Francisco recently ignored a forum selection bylaw that tried to force derivative suits to be filed in the Delaware Chancery Court. "A bylaw unilaterally adopted by directors...stands on a different footing [from contractual forum agreements]," Judge Seeborg wrote. "Particularly where, as here, the bylaw was adopted by the very individuals who are named as defendants, and after the alleged wrongdoing took place, there is no element of mutual consent to the forum choice at all, at least with respect to shareholders who purchased their shares prior to the time the bylaw was ... Continue Reading

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Mark Zuckerberg On His Co-Founder: “just take the lawsuit…I’m just going to cut him out and then settle with him”

I already made one post out of The Social Network (i.e., Why Mark Zuckerberg Won't Sue For Defamation Over The Facebook Movie), which is one more than I expected, but apparently there's another legal issue in there. Gawker and Business Insider published a scoop yesterday on the "dirty tricks" that Mark Zuckerberg used to force co-founder Eduardo Saverin out of the company. Relevant to our interests: As that first summer went on and TheFacebook.com grew more popular than anyone imagined, the company needed money to keep running. Finding investors wasn't hard. As early as July, Silicon Valley bigwigs like Mark Pincus, ... Continue Reading

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eBay v. Newmark: Al Franken Was Right, Corporations Are Legally Required To Maximize Profits

[Update, May 2012: Leo E. Strine, Jr., Chancellor of the Delaware Court of Chancery, referenced this post in his thoughtful new law review article, Our Continuing Struggle With the Idea That For-Profit Corporations Seek Profit, 47 Wake Forest L. Rev. 135 (2012).]   [Updates: Francis Pileggi has his take (courtesy of a guest blogger), as does Steven Davidoff at DealBook.   Also, Todd Henderson has a riposte. He's right that most companies can engage in modest philanthropic efforts without worry, but if a company starts putting its money where its mouth is on philanthropy, they'll get eBay'd, just like craigslist was. Craigslist didn't engage in ... Continue Reading

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The Idiot’s Guide Whistleblowing Under The Dodd-Frank Wall Street Reform Act

If you suspect your employer has violated securities, tax, or government contract laws, you can contact our firm for a free, confidential, no-obligation consultation using this form.   Corporate Counsel reported yesterday: The new federal whistleblower law is proving a hot item for many plaintiff law firms. Attorneys say that tipsters with visions of becoming millionaires are flooding their offices with calls. "In the last three weeks, I've had many, many more whistleblowing calls than I had in the last three years," said Rebecca Katz, a partner at Bernstein Liebhard in New York. Katz is a former senior counsel in ... Continue Reading

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Do You Know The Muffin Man, Who Lives Under A Trade Secrets Injunction?

As The Legal Intelligencer reported, When a top-level executive suddenly quits to take a job at a competing firm, the courts have the power to block the start of the new employment if the evidence shows that such an injunction is needed to prevent a likely misappropriation of trade secrets, the 3rd U.S. Circuit Court of Appeals has ruled. The ruling came in Bimbo Bakeries USA Inc. v. Botticella, in which the appellate court considered whether the manufacturer of Thomas' brand English muffins was entitled to an injunction that barred one of its top-level executives from taking a new job ... Continue Reading

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