Jack, a stockbroker, was an inexperienced in tax. He has sought the advice of an independent designated tax professional to advise him on tax planning and tax shelter that he needs. Simon, who is a designated accountant who specialized in those areas, advised Jack to invest in a number of multiple unit residential building (MURBs), a real estate investment project as tax shelter, by the conventional wisdom, were safe and conservative. When the value of MURBs fell during a decline in the real estate market, Jack lost heavily in his investment. Though the advice was perfectly sound at the time it was given, but unknown to Jack, Simon was also acting as adviser for developers in restructuring the MURBs and did not disclose that fact to Jack. In the context of breach of contract, is Jack liable for the loss of investment? In the context of breach of fiduciary duty, is Jack liable as well? Does ethics issue involve? Please state your reasons. Mr. Hunt, who has just retired, set up an investment account with Ms. Jane, an investment specialist, of TD Evergreen. Prior to his retirement, he is a Vice President of a large footwear manufacturer. His knowledge on investment is average and the investment account he had set is non-discretionary meaning no trade will be completed without Mr. Hunt express approval. Further, a non-discretionary account is one in which the investor decides on what trades to make. With Mr. Hunt’s approval, Ms. Jane sold 2,500 shares which was half of his 5,000 shares to BCE. By the time Mr. Hunt learned of the disposition of shares of stock, the stock market price went up. Mr. Hunt sued TD Evergreen for the lost of profit due breach of contract and breach of fiduciary duty. In the context of breach of contract, is TD evergreen liable for the lost profit? In the context of breach of fiduciary duty, is TD Evergreen liable? Please state your
Jack, a stockbroker, was an inexperienced in tax. He has sought the advice of an independent designated tax professional to advise him on tax planning and tax shelter that he needs. Simon, who is a designated accountant who specialized in those areas, advised Jack to invest in a number of multiple unit residential building (MURBs), a real estate investment project as tax shelter, by the conventional wisdom, were safe and conservative. When the value of MURBs fell during a decline in the real estate market, Jack lost heavily in his investment. Though the advice was perfectly sound at the time it was given, but unknown to Jack, Simon was also acting as adviser for developers in restructuring the MURBs and did not disclose that fact to Jack.
In the context of breach of contract, is Jack liable for the loss of investment? In the context of breach of fiduciary duty, is Jack liable as well? Does ethics issue involve? Please state your reasons.
Mr. Hunt, who has just retired, set up an investment account with Ms. Jane, an investment specialist, of TD Evergreen. Prior to his retirement, he is a Vice President of a large footwear manufacturer. His knowledge on investment is average and the investment account he had set is non-discretionary meaning no trade will be completed without Mr. Hunt express approval. Further, a non-discretionary account is one in which the investor decides on what trades to make. With Mr. Hunt’s approval, Ms. Jane sold 2,500 shares which was half of his 5,000 shares to BCE. By the time Mr. Hunt learned of the disposition of shares of stock, the stock market price went up. Mr. Hunt sued TD Evergreen for the lost of profit due breach of contract and breach of fiduciary duty.
In the context of breach of contract, is TD evergreen liable for the lost profit? In the context of breach of fiduciary duty, is TD Evergreen liable? Please state your
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