White-Collar Crimes: Fiduciary Fraud

A fiduciary duty can be understood as the obligation to act in the best interest of the other party. The laws in various jurisdictions apparently determine who is a fiduciary and their duties. It is critical to ensure that the fiduciary understand and accept that confidence and trust to exercise his expertise and discretion to act on behalf of the client. Arguably, research has shown that fiduciary fraud within the financial firms is widespread. In specific instances, there are those banks that have been held liable for employees’ actions. In Ireland for instance, under the common law, the bank employers are vicariously liable for their employee’s error of omission or acts that specifically occurs during their period of employment. On the other hand, under the Employment Equality Acts 1998-2011, the bank employers are also vicariously liable for employee’s discriminatory acts whether they are done with or without the consent of the employer. It is important that the banks should be held liable for their employee’s acts as a wait instill morals in the banking sector since the employers will ensure that their employees work as per the law to avoid being held liable. 

Whenever an act of fiduciary fraud happens, the bands are ready to write-off loses to uphold the image of the company rather than pursue justice. Public image plays a vital role in attracting and retaining clients; therefore, engaging in fraud cases would paint a negative picture of the banks and this would lead to increased loss of clients affecting their productivity and profitability. If I knew that acts of fiduciary fraud have occurred in my financial institution, my previous trust towards the company would decrease because there are higher chances that the same might happen in the future where I might be the victim. The decision to continue working with the bank or to move would entirely depend on how the bank handled such a case to ensure that the same will not be experienced again in the future.