Financial institution aiding and abetting liability

Barist, Jeffrey
October 2001
Journal of International Banking Regulation;Oct2001, Vol. 3 Issue 2, p155
Academic Journal
International financial institutions are vulnerable to third-party fraud. This is due, at least in part, to the role these institutions serve not only as holders of funds, but also as counterparties and market-makers for complex financial instruments. Because financial institutions typically owe no fiduciary duty to borrowers and counterparties, alternative theories of secondary liability for the fraud of others have become potent weapons for plaintiffs seeking to extend liability to financial institutions. This paper examines two such related cayuses of action, the common law claims of aiding and abetting a breach of fiduciary duty and aiding and abetting fraud.


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