In Nevada, boards of directors, lawyers, and other people or groups are often given the responsibility to act on behalf of another person, business or organization. When this includes the care of funds or property, these responsibilities are generally known as fiduciary duties. The people, or group, who is given fiduciary duties, are often referred to as fiduciaries, and those they represent are known as principals. Fiduciaries are typically expected to act on behalf of, and in the best interests of, their principal.
According to the Cornell University Law School’s Legal Information Institute, fiduciaries must avoid conflicts between their interests and those of their principals. Profiting from the relationship, unless the principal has been expressly informed, or acting in a way that benefits themselves over their principals, could result in business disputes. When such situations occur, it is often known as breach of fiduciary duty. This can include fiduciaries failing to uphold their responsibilities, follow through with their duties or meet their obligations.
When fiduciaries breach their duties, and their principals suffer damages as a result, they may be responsible for those losses. Under Title 29, Section 1109 of the U.S. Code, people must make good on any losses that result from the breach of fiduciary duty. They may also be required to restore any profits that were gained through the use of the plan’s assets.
Breach of fiduciary duty can create significant complications for those involved. When people entrust others with fiduciary duties, they depend on them to act on their behalf, rather than in their own interests. Those who have had this trust broken may find it of benefit to consult with a legal representative. An attorney may help them understand their rights and options, and determine whether they have grounds for legal action.