Law Commons^™

Loyalty Loses Ground To Market Freedom In The U.S. Supreme Court, Daniel Harris

William & Mary Business Law Review

In the last decade, the U.S. Supreme Court has taken a much less moralistic and much more market-oriented approach to questions of fiduciary loyalty. In cases involving fiduciaries with conflicts of interest, the Court has shifted the burden of proof to the party claiming unfair treatment, thereby protecting deals and making loyalty harder to enforce. The Court has also struck down or narrowly construed laws designed to prevent disloyalty by fiduciaries on the theory that broad prohibitions on business conduct encroach on constitutionally protected freedoms.

This Article discusses how the Supreme Court’s new approach represents a departure from the Court’s …

Broker-Dealers, Institutional Investors, And Fiduciary Duty: Much Ado About Nothing?, Lynn Bai

William & Mary Business Law Review

Under the mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC is soliciting public opinions on whether broker-dealers should be subject to a fiduciary duty when advising retail and institutional investors. This Article focuses on the advisability of such a proposal for institutional investors. It shows that, first, a fiduciary duty could potentially enhance broker-dealers’ standard of conduct for only a subset of institutional investors who are well capitalized, capable of assessing risks independently, and acknowledge in writing their nonreliance on broker-dealers’ advice. Thus, the benefit of fiduciary duty is much narrower than what …