Texas Shareholder Fraud Lawyer | Breach of Fiduciary Duty

Business fraud, breaches of fiduciary duty, and misrepresentations cost investors, shareholders, and businesses billions of dollars each year. Shareholder actions include investment fraud lawsuits, minority shareholder lawsuits, shareholder suppression lawsuits, and shareholder breach of fiduciary duty cases. These shareholder actions allow investors to seek damages for business misrepresentations, breaches of fiduciary duties, and fraud. Often these business lawsuits allow investors and shareholders to seek back large sums of money that have been wrongfully taken from them.

If you have questions about a shareholder investment fraud lawsuit, minority shareholder lawsuit, shareholder suppression lawsuit, or other business fraud lawsuit, contact Texas shareholder investment fraud lawyer Jason Coomer. Call 866-474-1477.

Since the 1980s, the deregulation of investment markets and decreased SEC enforcement have led to large investor fraud schemes that have fraudulently taken billions of dollars from consumer and business investors. Many businesses have set up elaborate investment scams that take advantage of high-end investors, accredited investors, business investors, and individual investors.

During this era of deregulation, many safeguards were removed, and even the remaining rules and safeguards were not always followed when fraudulent businesses lured investors into risky investments. Understanding SEC rules on what should have been disclosed during investment negotiations, as well as who may be a potential defendant for failing to properly disclose information or intentionally misleading investors, is crucial in determining if a shareholder or investor has a viable claim.

Determining who is a viable defendant also requires understanding the fiduciary duties owed by corporate officers, the board of directors, investment firms, brokers, financial planners, real estate professionals, lawyers, and other business professionals. Understanding these duties can help determine if there is a viable party to seek compensation from after a large investment was lost or stolen.

Shareholder Suppression and Breach of Fiduciary Duty

Majority shareholders sometimes wrongfully use their controlling interest in a company for their own benefit at the expense of minority shareholders. When a majority shareholder engages in corporate malfeasance or breaches a fiduciary duty, the minority shareholder may have a viable shareholder suppression claim.

In any shareholder suppression, corporate malfeasance, or breach of fiduciary duty case, it's important to understand the rights, fiduciary duties, and responsibilities of majority shareholders, the board of directors, managing partners, corporate officers, corporate counsel, chief financial officers, and managers. It's also important to gather as much evidence of the malfeasance, self-dealing, fraud against shareholders, wrongful suppression, or embezzlement as possible before litigation begins. Once litigation starts, obtaining evidence often becomes difficult as documents begin to disappear, and proving spoliation, the intentional, reckless, or negligent destruction, loss, alteration, or obstruction of evidence relevant to litigation, becomes a key issue.

Texas Negligent and Fraudulent Misrepresentation

Texas has business tort laws against both fraudulent and negligent misrepresentation that can be brought against businesses and individuals whose misrepresentations cause significant damages. Under Texas negligent misrepresentation law, a business or individual "who, in the course of his business, profession or employment, or in any transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information," as described by the Restatement (Second) of Torts § 552. See Federal Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991).

Pursuing a Texas fraudulent or negligent misrepresentation lawsuit against a corporation, partnership, limited liability company, professional corporation, individual, or other business requires an experienced business litigation lawyer able to review and prosecute the case.

Accredited Investor Fraud

Accredited investors are common targets of investment fraud schemes. Under the Securities Act of 1933, a company that offers or sells securities must register them with the SEC or find an exemption from the registration requirements. The Act provides companies with a number of exemptions. For some of the exemptions, such as Rules 505 and 506 of Regulation D, a company may sell its securities to what are known as "accredited investors."

Federal securities law defines an accredited investor under Rule 501 of Regulation D as:

• A bank, insurance company, registered investment company, business development company, or small business investment company
• An employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million
• A charitable organization, corporation, or partnership with assets exceeding $5 million
• A director, executive officer, or general partner of the company selling the securities
• A business in which all the equity owners are accredited investors
• A natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase
• A natural person with income exceeding $200,000 in each of the two most recent years, or joint income with a spouse exceeding $300,000 for those years, and a reasonable expectation of the same income level in the current year
• A trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes

By targeting accredited investors, some companies and their lawyers are able to exempt themselves from disclosure rules. When investing as an accredited investor, it's often a good idea to have an attorney assist you before making a substantial investment. If you've already made a substantial investment and suspect foul play, it's important to understand your rights and how to seek information about your investment.

Why Choose Jason Coomer for Your Shareholder Fraud Claim

Texas business fraud attorney Jason Coomer helps investors and business owners who have lost significant amounts of money through the wrongful acts of fraudulent businesses, dishonest majority shareholders, and negligent or fraudulent corporate officers. He reviews corporate documents, including accounting records, contracts, and correspondence, to determine whether corporate malfeasance has occurred. As a Texas business fraud litigation attorney, he has handled commercial litigation between business investors and shareholders battling for stock, patents, trademarks, copyrights, and other business assets, and is familiar with negotiations, mediations, arbitrations, Texas state courts, and federal courts. Jason Coomer is an experienced business litigation attorney who handles business torts, business fraud lawsuits, theft of trade secrets, unfair business actions, and shareholder actions.

Unfair Business Competition Actions

Unfair business competition actions arise when a business uses unfair practices to damage another business or put it out of business. Examples include a competing business intentionally stealing trade secrets, releasing false press releases, using short-term predatory pricing, demanding exclusive contracts from suppliers, forcing lenders to call in loans, stealing business, or spreading false information in the business community to damage a competitor. Because of the size of many small businesses, losing a major contract, having a supplier stop providing supplies, having a lender call in a loan, or one false press release can cause significant damage and even bankruptcy.

If you're a Texas business owner who has been damaged through the illegal actions of another business and suffered a significant loss of revenue or profits, contact Austin Texas business lawyer Jason Coomer. He works with Texas business owners to recover losses caused by unfair business competition.

Jason Coomer works with shareholder and investment fraud lawyers across Texas, including in Houston, Dallas, San Antonio, and Austin, to fully investigate cases across the state. If you need a Texas shareholder investment fraud lawyer to advise you on a shareholder suppression lawsuit, minority shareholder lawsuit, accredited investor lawsuit, business fraud lawsuit, negligent misrepresentation lawsuit, breach of fiduciary duty lawsuit, or unfair business competition action, contact Jason Coomer's office for a FREE, CONFIDENTIAL CONSULTATION. Call 866-474-1477 (toll free).