We are pleased to announce that Bennett and Belfort, P.C. managing partner, David E. Belfort, was quoted in the December 21, 2017 issue of Massachusetts Lawyers Weekly in a cover page article entitled, “Breach-of-fiduciary claim vs. accountant allowed.” http://masslawyersweekly.com/2017/12/21/breach-of-fiduciary-duty-claim-vs-accountant-allowed/. The article discusses a Suffolk Superior Court decision coming out of the Business Litigation Session authored by Hon. Judge Leibensperger on a Motion To Dismiss. The Court held that a lawsuit can proceed for breach of fiduciary duty where an accountant allegedly obtained an equity interest in the investment fund he managed through written instruments he submitted to the plaintiffs (his bosses) without fully disclosing that the documents transferred equity to the Defendant. Interestingly, this purported ownership transfer took place just a short time before the Defendant left the company’s employ, and the transfer documents were prepared by a junior level attorney at a law firm that represented the company.
Attorney Belfort addressed the evidentiary challenges which remained for the plaintiff as the case continues. “Fiduciary duty claims still require that you have actual evidence of malfeasance in some way or a material omission,” Attorney Belfort said. “In this case, if they are able to prove that the defendant deliberately misled them or concealed key information, then they have a chance. If they can’t, they’re going to have a tough time getting through summary judgment.” The Plaintiffs admit they signed two documents relative to the equity transfer at issue but say they did not fully read the documents. Plaintiffs claim that the Defendant, as a senior executive at the firm, had a fiduciary duty beyond presenting the documents to them for signature, including to inform them about the equity transfer it contained, which was done – they argue – without Plaintiffs’ knowledge and approval. This, they claim, is sufficient to show a breach of fiduciary duty under Massachusetts law and at this early stage according to Judge Leibensperger – they were correct.