Protagenic Therapeutics Inc. (PTIX)

[RoagTrader]

One form of a breach of fiduciary duty is called self-dealing, where the fiduciary does something to help himself at the expense of the other party. For example, if the trustee managing investments in a trust diverts a valuable opportunity away from the trust and into his own business, that's a form of self-dealing. Similarly, if the manager of a pension fund permits an investment advisor to manage the fund in return for a bribe, that's a breach of fiduciary duty. If the fiduciary's contract with the beneficiary breaches a fiduciary duty, the law will refuse to enforce the contract.

The officers and directors of corporations bear a fiduciary responsibility to the corporation and to its shareholders. If the officers and directors waste corporate assets, that's a breach of fiduciary duty that may subject them to liability.

In addition, the majority shareholder has a fiduciary duty to the minority shareholder. So, let's suppose the majority shareholder refuses to declare a dividend to force the minority shareholder to sell his interest, that could be a breach of fiduciary duty.

But it isn't just the fiduciary who's liable. Under New York law, a person who induces a breach of fiduciary duty is also liable. This may be helpful if the fiduciary is judgment proof-- i.e., without the assets to pay a large judgment. Under New York law, the injured party may sue a relatively peripheral figure that induced the breach, who may have the resources to pay a judgment.

The existence of a fiduciary relationship imposes on the fiduciary a duty to volunteer relevant facts. That is, in an arms-length relationship, neither party is required to volunteer facts. But in a fiduciary relation, the fiduciary is required to disclose relevant facts. Failure to do so gives rise to a fraud claim. Thus, for example, if a fiduciary is selling real estate to the cestui que trust, the fiduciary is obligated to volunteer all the relevant facts.

http://www.newyorklitigator.com/lawyer-attorney-1626209.html