When you set someone up to oversee serious financial accounts, you hope that they strive to work in your interests. This does not always happen. Some people violate the trust you place in them to benefit themselves. You may be wondering, “What are some examples of fiduciary misconduct in Louisiana?” Understanding these can help you decide whether you need to speak with an attorney.
Experienced Fiduciary Misconduct Lawyers in Louisiana
At Hymel Davis & Petersen, we understand Louisiana fiduciary litigation laws and have helped many entities, big and small, with cases involving fiduciary misconduct. We have been able to remove trustees and others who are not acting in the interests of the party they serve. Some of these cases have gone all the way to the Louisiana Supreme Court, and we have achieved positive results.
What Is Fiduciary Misconduct?
Fiduciary misconduct applies to many different areas of law. A fiduciary is someone who manages another person’s money. A relationship between a manager and another party is a fiduciary relationship.
To be successful in a fiduciary misconduct case, you first have to prove that you have a fiduciary relationship with the individual accused of misconduct. This can be done through contracts or other forms of evidence.
Additionally, you must prove that the fiduciary went against their obligations to benefit the other party. These actions have to have caused the recipient damages, usually financial.
What Are Some Examples of Fiduciary Misconduct in Louisiana?
Fiduciary misconduct can occur at the personal or business level. Many actions can be considered fiduciary misconduct, including:
- Fraud. Representing yourself or your financial accounts in a misleading way is considered fraud. Stealing money from entrusted accounts is also considered fiduciary misconduct. These actions could also include additional charges, such as embezzlement. They can be difficult to trace.
- Conflicts of interest. If someone is a business owner, they should not serve as a fiduciary for a business financial account of a direct competitor. If someone could benefit from the account performing poorly, that could constitute a conflict of interest.
- Abuse of power. Just because a fiduciary has access to assets, such as property or real estate, does not mean they own them. You are generally not allowed to transfer any property from the account into your name. A fiduciary oversees the account but does not directly own the property.
- Multiple beneficiaries. In some situations, more than one individual or party uses a single person as a fiduciary. In these cases, the fiduciary has to be extremely careful to treat multiple beneficiaries equally. If one feels slighted, they might accuse you of fiduciary misconduct.
- Extreme mismanagement. One bad decision made by a fiduciary might not be enough to claim misconduct. If the fiduciary displays gross incompetence and fails to make reasonable decisions regarding the financial account or estate, it could constitute misconduct, and the beneficiary could be removed.
One of the most obvious cases of fiduciary misconduct involved securities on unstable home loans that caused the 2008 recession and led to banks paying over $148 billion in settlements. Working with an attorney can prevent misconduct from spiraling out of control.
Why Hire a Fiduciary Litigation Lawyer?
When you hire a fiduciary litigation lawyer, they can review a fiduciary’s actions and evaluate whether they constitute misconduct. Actions like sudden decisions without proper notification could be cause for alarm.
If the fiduciary is unwilling to let you access certain documents related to your accounts, having professional representation can help. Their strategies can help you retrieve important documents so that you can review the status of your financial situation.
If you notice inconsistencies within your financial accounts managed by a fiduciary, speaking with an attorney as early as possible is a positive step to prevent future issues. While misconduct may not always be present, it is still important to verify that fiduciaries are acting in your interests.
In Baton Rouge, fiduciary misconduct cases are usually handled in the 19th Judicial District Court. For federal issues, the U.S. District Court – Middle District of Louisiana would hear the claims.
Why Choose Us?
At Hymel Davis & Petersen, we have worked with individuals and multi-million-dollar businesses. We have assisted clients who have been acquitted of their charges. We have helped others identify and prove examples of fiduciary misconduct to prevent it from affecting themselves or their businesses.
FAQs
What Is Fiduciary Misconduct?
Fiduciary misconduct takes place when someone who is trusted to act in the financial benefit of another person or party does not do so. Misconduct in this context can happen in a business relationship, a legal partnership, or even within a trust or estate plan. The proof takes place in the action of misconduct and the establishment of the fiduciary relationship.
Is There a Time Limit for Filing a Fiduciary Misconduct Claim?
The time limit for filing a fiduciary misconduct claim depends on when the breach was discovered. This timeline could be nebulous and might include multiple dates. That is why speaking with an attorney is so important. They can help you determine whether you have a valid claim and the time limit for filing.
What Are Fiduciaries Not Allowed to Do?
Fiduciaries are not allowed to exploit the power they have to control funds for another entity. This can include a variety of actions. For example, an individual with access to company clients cannot redirect them to another company for greater profits. If a fiduciary has a conflict of interest but does not reveal this, it could also be considered misconduct.
How Are Fiduciaries Held Accountable in the Event of Misconduct?
Fiduciaries are usually held accountable in the event of misconduct through financial penalty. They might be required to pay restitution to the other parties within the fiduciary relationship. In cases where the misconduct is particularly egregious, a judge might order punitive damages. These are meant to punish the perpetrator and prevent further harm.
Don’t Let People Work in Bad Faith
Companies have paid over $1 trillion in fines associated with regulatory issues and misconduct. If you suspect a case of fiduciary misconduct happening within your life or business, speak with an attorney to prevent it from draining your finances. Schedule a consultation with Hymel Davis & Petersen to learn more.
