Reif Law Group, P.C. has extensive experience handling corporate, partnership and executive fraud cases throughout the State of California. While corporate fraud can result in criminal charges, our practice is focused on recovering losses suffered by businesses, owners and investors through civil litigation and defending officers and directors who have been accused of wrongdoing.
Whether you have suffered financial losses due to fraud, theft or misrepresentation, or have been accused of misconduct, hiring an experienced and aggressive corporate fraud attorney is an important step to assert or protect your rights. RLG’s clients have the confidence that our aggressive corporate law team is in your corner. Contact our office Los Angeles or Irvine office today to schedule a consultation.
Common Types of Corporate Fraud in Southern California
Officers and directors have a myriad of duties to the corporation and the shareholders yet corporate fraud is commonplace and examples include:
- Breach of duty of care–One of the core duties of officers and directors is the duty of care. This means that they have a fiduciary duty to act responsibly in managing corporate affairs and must also act in good faith when making business decisions. This duty can be breached when an officer or director fails to exercise good judgment or acts in bad faith.
- Breach of duty of loyalty — Officers and directors also have a duty of loyalty, which means that they must act in the best interests of the corporation and shareholders. A breach of duty of loyalty occurs when an officer or director profits at the business’s expense through self-dealing, misusing corporate assets, using corporate funds for personal expenses or seizing a corporate opportunity.
- Corporate malfeasance — Corporate or executive malfeasance involves malfeasance by a company, its officers and directors who use company resources for improper purposes, such as fraud, conversion or embezzlement. Corporate malfeasance can also involve inaction when officers and directors fail to monitor important performance metrics, such as income, expenses, and revenues.
- Embezzlement — Corporate officers, directors, and employees who intentionally and illegally use corporate funds for personal gain or any other unauthorized purpose can be held liable for embezzlement.
- Self-dealing — Officers and directors who take advantage of their position and act in their own interest, rather than that of the corporation, can be held liable for self-dealing, which is considered a breach of fiduciary duty. Self-dealing may involve purchasing company stock based on inside information or misusing corporate funds.
- Usurping a corporate opportunity — Officers and directors have a fiduciary duty not to “usurp” a corporate opportunity. When an officer or director is presented with a business opportunity that is the same or related to one in which the corporation is involved, they cannot pursue that opportunity for their personal gain. Instead, officers and directors have a duty to first offer the business opportunity to the corporation.
Why Corporate Governance Matters
Boards of Directors have an obligation to establish policies and procedures to ensure that corporate activities adhere to applicable laws. Under the Sarbanes-Oxley Act of 2002, for example, directors of public corporations must establish internal controls to ensure the accuracy of corporate financial statements and balance sheets.
The law imposes penalties for non-compliance, including fines and the potential delisting of a company from public stock exchanges. Moreover, chief executive officers and chief financial officers who knowingly submit incorrect certifications of financial statements can be held civilly and criminally liable and risk fines and possible imprisonment.
Ultimately, corporate governance encompasses a wide range of duties, including codes of ethics, codes of conduct, fiduciary duties, conflicts of interest, management succession plans, and policies governing corporate transactions. By failing to establish a robust governance structure and setting the tone for governance with integrity, directors can be held liable for fraud and other misconduct engaged in by the corporation, its executives and employees.
How Reif Law Group Can Help with Corporate Fraud
The attorneys at Reif Law Group prosecute and defend corporate malfeasance and fraud cases for companies, officers, directors and investors in state and federal court.
Because officers and directors are not necessarily protected by the “corporate veil” and can be held personally liable for fraud, we also provide those who have been accused of misconduct with unmatched representation. Regardless of the forum, litigation, arbitration or regulatory enforcement action, we will work to achieve the best outcome for your case.
Contact Our Aggressive Corporate Fraud Attorneys Today
To arrange a consultation with an experienced attorney at RLG, please contact us today at our contact page or at (310) 494-6500.