Investment Law Au
BACHELOR OF BUSINESS (ECONOMICS AND FINANCE)
Law of Investment and Financial Markets
LAW 2460
Group Report
Issues
Through an anonymous letter, Mandy was induced into attending a seminar held by Warren Hopkins. Mandy trusted the advices given by Warren and the professional investment managers and signed up for Investbank. However, months later she found out that the Investbank system was a scam.
There are several issues to be addressed, mainly with regards to whether did Warren owe Mandy a duty of care and if Mandy 's funds are able to be recovered. We will be addressing the issue through 2 categories of law, namely statutory and common law.
Common Law
Negligent Advice
Under the rules of negligence, a plaintiff could claim damages for pure monetary losses caused by a negligent statement without any physical damage being present. This rule applies even as no contractual relationship exists between two parties. Hedley Bryne & Co Ltd V Heller & Partners Ltd. 1 By applying the neighbor principle, Donoghue v Stevenson2, when Warren and the professional investment managers come forth for the seminar, it is presumably appropriate to say that the speakers should have realized that their speech would be relied upon in decision-making for the investors, especially so when this is a seminar, not just a casual social gathering. Therefore, it can be assumed that it was reasonable for Mandy to have relied on the speakers ' speech, since they were introduced as 'professional investment managers '. RSP Architects Planners & Engineers V MCST Plan No. 1075) 3
Fiduciary Duties
As Mandy rely on the speakers’ advice and signed up for Warren’s Investbank, the speakers’ stands in a fiduciary relationship to Mandy. Boardman V Phipps4.
In which a fiduciary duty is a responsibility to act in good faith for the benefit of another, the essence of this relationship is to exercise duties in the interests of the
Law of Investment and Financial Markets
LAW 2460
Group Report
Issues
Through an anonymous letter, Mandy was induced into attending a seminar held by Warren Hopkins. Mandy trusted the advices given by Warren and the professional investment managers and signed up for Investbank. However, months later she found out that the Investbank system was a scam.
There are several issues to be addressed, mainly with regards to whether did Warren owe Mandy a duty of care and if Mandy 's funds are able to be recovered. We will be addressing the issue through 2 categories of law, namely statutory and common law.
Common Law
Negligent Advice
Under the rules of negligence, a plaintiff could claim damages for pure monetary losses caused by a negligent statement without any physical damage being present. This rule applies even as no contractual relationship exists between two parties. Hedley Bryne & Co Ltd V Heller & Partners Ltd. 1 By applying the neighbor principle, Donoghue v Stevenson2, when Warren and the professional investment managers come forth for the seminar, it is presumably appropriate to say that the speakers should have realized that their speech would be relied upon in decision-making for the investors, especially so when this is a seminar, not just a casual social gathering. Therefore, it can be assumed that it was reasonable for Mandy to have relied on the speakers ' speech, since they were introduced as 'professional investment managers '. RSP Architects Planners & Engineers V MCST Plan No. 1075) 3
Fiduciary Duties
As Mandy rely on the speakers’ advice and signed up for Warren’s Investbank, the speakers’ stands in a fiduciary relationship to Mandy. Boardman V Phipps4.
In which a fiduciary duty is a responsibility to act in good faith for the benefit of another, the essence of this relationship is to exercise duties in the interests of the
Bibliography: John McLaren, M. N. (2011). Law of Investments. Sydney: Thomson Reuters (Professional) Australia Limited . Student at Law. (n.d.). Retrieved February 26, 2012, from http://www.studentatlaw.com/articles/152/1/Fiduciary-duties/Page1.html Tabalujan, B