Breach of Fiduciary Duty: Misappropriation of Funds
Fiduciary duty represents a legal and ethical bond of trust, where one party is obligated to act in the best interests of another. When this trust is violated—particularly through the misappropriation of funds—it can cause significant financial and reputational damage. If you suspect misappropriation of funds by someone with a fiduciary responsibility, it's important to address the matter swiftly with the help of a qualified attorney.
The Parzivand Law Firm, PLLC has experience handling breach of fiduciary duty cases, including those involving misappropriation of funds. With offices in Stafford and Houston, Texas, Attorney Hessam Parzivand combines his experience in business law and employment disputes to offer tailored legal solutions for clients in Stafford, Sugarland, and Fort Bend County.
If you're facing a fiduciary breach involving misappropriated funds, understanding your rights under Texas law and consulting with a business law attorney can help you recover losses and hold the responsible parties accountable.
What Is a Breach of Fiduciary Duty?
Fiduciary duty arises when one party places trust in another to act with loyalty, integrity, and good faith. This responsibility can exist in both professional and personal relationships where one party holds power, access, or information to act on behalf of another. Some common fiduciary relationships include:
Employers and employees
Business partners
Trustees and beneficiaries
Shareholders and corporate officers
Attorneys and clients
A breach of fiduciary duty occurs when the fiduciary betrays this trust and prioritizes their own interests over those of the party they owe responsibility to. When misappropriation of funds is involved, the breach violates fiduciary principles and can also constitute theft or fraud under state laws. Many misappropriation cases involve deliberate misuse, diversion, or withholding of financial resources meant for legitimate purposes.
How Misappropriation of Funds Intersects with Fiduciary Duty
Misappropriation of funds within a fiduciary relationship is not just a betrayal of trust. It is often a violation of specific legal and financial standards. Misappropriation can include any misuse of funds that deviates from their intended purpose. A few examples of how misappropriation might manifest in fiduciary relationships include the following:
Using business accounts or funds for personal purchases
Reallocating targeted investments or savings without authorization
Double-dealing or self-dealing in business transactions
Purposefully hiding transactions or falsifying financial documents
Delaying payments to divert funds for personal or unrelated use
Allocating trust or estate funds in a way that benefits the fiduciary rather than the beneficiaries
These actions can have cascading effects, such as financial losses, strained relationships, and legal liabilities. Misappropriation may involve financial damages and the erosion of trust that is often vital to professional and personal rapport. Under Texas law, many misappropriation cases may also overlap with statutory violations.
Texas Law and Fiduciary Duty
Texas courts recognize both formal and informal fiduciary duties, providing laws for those seeking remedies for breaches. Formal fiduciary duties typically stem from defined roles, such as a trustee, corporate officer, or director. Informal fiduciary duties arise from close relationships, such as family members or long-term business partners, where reliance and trust are implied.
When substantiating a breach of fiduciary duty, including misappropriation of funds, the following criteria must be established.
The existence of a fiduciary relationship
A breach of the fiduciary's duty to act in the other party's interest
Losses incurred as a result of the breach
Cases involving misappropriation often carry heightened scrutiny, particularly if multiple financial transactions, records, or assets are in question. Furthermore, criminal charges for theft or fraud may apply in tandem with civil lawsuits. Resolving such cases typically requires the precise collection of evidence, financial audits, and carefully structured legal arguments.
Signs of a Fiduciary Breach or Misappropriation
Identifying the misappropriation of funds in fiduciary relationships is not always straightforward, especially when those responsible actively work to conceal their actions. However, there are several warning signs that could point to misconduct:
Unexplained discrepancies in budget reports or financial records
Transfers of funds without adequate documentation
Overlapping or conflicting job duties held by the fiduciary
Refusal to disclose financial information upon request
Missing receipts or a lack of transparency in how money is spent
Lavish lifestyle changes that conflict with known income levels
Complaints or concerns expressed by whistleblowers or beneficiaries
Sudden amendments or revisions to investment plans or trust documents
Being vigilant for these red flags can help prevent or minimize losses. If you suspect misappropriation, contact an attorney immediately for clarity on the best steps to take.
How Attorney Hessam Parzivand Can Help with Breaches of Fiduciary Duty
Misappropriation of funds can leave victims feeling overwhelmed or betrayed. However, working with a business law attorney helps you protect your legal rights and take the appropriate steps to secure restitution. Attorney Hessam Parzivand can provide essential services such as:
Investigation: Conducting audits and gathering evidence to substantiate claims of misappropriation.
Filing claims: Preparing and presenting legal actions to enforce and uphold fiduciary responsibilities.
Negotiation or litigation: Working to settle disputes or representing you effectively in court when necessary.
Calculating damages: Analyzing financial and non-financial harm to determine the appropriate level of compensation.
Advisory services: Offering strategic insights into Texas fiduciary law to guide your decisions.
Enforcing rulings: Ensuring that judgments or settlements are followed and financial losses are recovered wherever possible.
No matter the details of your case, having an experienced attorney on your side significantly improves your ability to resolve fiduciary disputes efficiently and effectively.
Contact an Experienced Business Law Attorney
Misappropriation of funds is a serious breach with wide-reaching consequences. At The Parzivand Law Firm, PLLC, Attorney Hessam Parzivand is dedicated to providing comprehensive support in fiduciary and business law cases. From fiduciary breaches to business litigation, he serves clients across Houston, Stafford, Sugar Land, and Fort Bend County.
If you suspect a breach of fiduciary duty through misappropriation of funds, contact The Parzivand Law Firm today to schedule a consultation. Protect your financial security, reclaim what was wrongfully taken, and hold those responsible accountable.