spousal Fiduciary Duty

Summary of the Case: 

Esoteric Advisors was engaged in a divorce case where our role was to assess the spousal duty of fiduciary responsibility which included jointly and individually held investment accounts. Our analysis and opinion focused on several investment accounts spanning trading activity over a decade.

The husband, acting independently, engaged in stock market trading across various accounts. We determined a consistent pattern in which the husband traded in concentrated stock positions, with fewer than six holdings at any given time. This concentration rendered the activity highly speculative and inappropriate.

Esoteric Advisors strongly emphasized to the court that the husband’s behavior resembled gambling disguised as investing, leading to approximately half of the investment portfolio being lost. 

Esoteric Advisors recommended a remedy to the court, proposing the equalization of assets by holding the husband responsible for both realized and unrealized losses, equal to the spousal share. This remedy would fully compensate the spouse for the incurred losses.

Disposition: 

The court adopted our position and remedy.