Virginia Jury Instruction - 4.4.3 Rule 10(b) - 5(c) Fraudulent Practice or Course of Dealing Stockbroker Churning - Violation of Blue Sky Law and Breach of Fiduciary Duty

• Category: Federal - Jury Instructions
• State: Multi-State
• Control #: US-11CF-4-4-3
• Format: Word; Rich Text

Description

This form contains sample jury instructions, to be used across the United States. These questions are to be used only as a model, and should be altered to more perfectly fit your own cause of action needs.

Virginia Jury Instruction — 4.4.3 Rule 10(b— - 5(c) Fraudulent Practice or Course of Dealing Stockbroker Churning — Violation of Blue Sky Law and Breach of Fiduciary Duty refers to a legal concept that deals with fraudulent practices and violations committed by stockbrokers in Virginia. This jury instruction instructs jurors on the criteria that need to be considered while assessing a stockbroker's liability for churning, violating blue sky laws, and breaching fiduciary duties. Churning by Stockbroker: Churning, a form of fraudulent practice, occurs when a stockbroker excessively trades the client's account to generate commissions without considering the client's best interests. Stockbrokers are supposed to maintain a reasonable and fair level of trading activity in client accounts. However, if a stockbroker engages in excessive trades, leading to substantially more commissions for them, it might be categorized as churning. Violation of Blue Sky Laws: The violation of blue sky laws refers to the unlawful activities committed by stockbrokers related to selling securities. Blue sky laws are state regulations designed to protect investors from fraud and ensure fair dealing in the sale of securities. If a stockbroker is found to violate these laws by selling securities that are not registered or failing to disclose material information, it is considered a violation of blue sky laws. Breach of Fiduciary Duty: Stockbrokers owe their clients a fiduciary duty, which means they must act in the best interests of their clients and prioritize their clients' interests over their own. A breach of fiduciary duty occurs when a stockbroker fails to fulfill their fiduciary obligations, such as providing suitable investment recommendations, disclosing conflicts of interest, or engaging in self-dealing. Breach of fiduciary duty can occur in various ways and can be considered a separate claim in addition to churning or violating blue sky laws. Different Types of Virginia Jury Instruction — 4.4.3 Rule 10(b— - 5(c) Fraudulent Practice or Course of Dealing Stockbroker Churning — Violation of Blue Sky Law and Breach of Fiduciary Duty: 1. Churning without Violation of Blue Sky Laws or Breach of Fiduciary Duty: This instruction may be relevant when a stockbroker engages in excessive trading to generate commissions but has not violated any blue sky laws or breached fiduciary duties. Jurors need to be informed of the specific elements required to find the stockbroker liable for churning only. 2. Violation of Blue Sky Laws without Churning or Breach of Fiduciary Duty: This instruction may be applicable when a stockbroker has sold unregistered securities or failed to disclose material information, violating blue sky laws. In this case, jurors need to understand the criteria necessary to hold the stockbroker accountable for violating blue sky laws without considering churning or breach of fiduciary duty. 3. Breach of Fiduciary Duty without Churning or Violation of Blue Sky Laws: This instruction could be used when a stockbroker has breached their fiduciary duty, for example, by providing unsuitable investment recommendations or engaging in self-dealing, but has not committed churning or violated blue sky laws. Jurors should be instructed on the elements required for finding the stockbroker liable for breach of fiduciary duty alone.