Austin, TX commercial litigation attorney John R. McConnell explains what a breach of fiduciary duty is. He states that a breach of fiduciary duty occurs when a person in a position of trust violates that trust. This typically involves individuals such as corporate officers, directors, presidents, trustees, or business partners—anyone who has a legal and ethical obligation to act in the best interests of others.

When a fiduciary engages in self-dealing, diverts money for personal gain, creates a conflict of interest, or competes directly against the entity they serve, that conduct constitutes a breach of duty. He notes that fiduciaries are expected to prioritize the interests of their beneficiaries—whether it’s the corporation, its shareholders, or the members of a trust—above their own. When they fail to do so and act instead for personal benefit, they violate the very trust and loyalty that their position requires.