BMO Capital Markets' Misleading Bond Sales

In January 2025, BMO Capital Markets, a unit of Bank of Montreal, agreed to pay $40.7 million to settle charges with the U.S. Securities and Exchange Commission (SEC). The firm failed to supervise employees who misled investors about mortgage-backed bonds between December 2020 and May 2023. Employees provided misleading offering sheets and metrics, suggesting the bonds were backed by higher-interest-rate mortgages than they actually were. This breach of fiduciary duty resulted in a $19 million civil fine, $19.42 million in disgorgement, and $2.24 million in interest. BMO neither admitted nor denied wrongdoing but agreed to pay the settlement and face censure.

This case demonstrates how a failure to properly supervise fiduciary responsibilities can lead to significant financial losses for investors and costly penalties for institutions, emphasizing the need for stringent oversight.

Source: Reuters, ‘BMO unit to pay $40.7 million in US SEC settlement over misleading bond sales’

American Airlines' ESG Investment Breach

In January 2025, a federal judge determined that American Airlines breached its fiduciary duty by promoting Environmental, Social and Governance (ESG) investing in its employees' 401(k) plans. The court found that the investment decisions, influenced by socially and environmentally responsible factors, were not aligned with financial interests. This ruling followed a lawsuit by an American Airlines pilot who claimed that the focus on ESG led to underperformance of the retirement funds managed by BlackRock. The judge also referenced past objections to diversity considerations in corporate compliance. Following the ruling, the court will assess potential damages or other legal remedies.

This example illustrates the legal risks companies face when fiduciary decisions prioritize social objectives over financial returns, potentially leaving employees and stakeholders at a disadvantage.

Source: Reuters, American Airlines' focus on ESG in retirement plan is illegal, US judge rules

Texas Lawsuit Against Allstate for Unauthorized Data Collection

In January 2025, Texas Attorney General Ken Paxton filed a lawsuit against Allstate, alleging the company collected driver data via cell phones without consent to increase insurance premiums and deny coverage. The complaint claims that Allstate developed tracking software integrated into various mobile apps and collected data from over 45 million Americans. This data was used by Allstate for insurance rate adjustments and sold to other insurers. Additionally, Allstate is accused of purchasing location data from vehicle manufacturers to verify driving patterns. The state is seeking restitution, damages, civil fines and the destruction of the illegally obtained data, citing violations of Texas data privacy and insurance laws.

This case highlights how breaches of fiduciary duty can extend to unauthorized data collection practices, showing the intersection of fiduciary responsibilities with consumer privacy rights.

Source: Reuters, Texas sues Allstate for collecting driver data without consent

Medical Malpractice Verdict in New Mexico

In December 2024, jurors in New Mexico awarded a man more than $412 million in a medical malpractice case involving a men's health clinic operating in several states. The lawsuit alleged that the clinic misdiagnosed the patient and subjected him to unnecessary and invasive treatments, constituting a breach of fiduciary duty. The verdict is considered one of the largest in U.S. medical malpractice cases, highlighting the severe consequences of fiduciary breaches in healthcare settings.

This case underscores the critical importance of trust in fiduciary relationships, particularly in healthcare, where lapses can have life-altering and financially devastating consequences.

Source: Associated Press, New Mexico man awarded $412 million medical malpractice payout for botched injections

UnitedHealth Units Ordered to Pay $165 Million for Misleading Consumers

In January 2025, three insurance companies owned by UnitedHealth were ordered to pay over $165 million for misleading consumers in Massachusetts. The companies misled thousands into unknowingly purchasing supplemental health insurance between 2012 and 2016. Massachusetts Attorney General Andrea Campbell announced the ruling, which resulted in the largest civil penalties ever awarded under the state's consumer protection law. Superior Court Judge Helene Kazanjian imposed nearly $50.1 million in restitution and $115.1 million in civil penalties. The deceptive practices targeted financially vulnerable consumers, hiding costs and misrepresenting policies. UnitedHealth plans to appeal the decision, asserting that it is unsupported by evidence and contrary to Massachusetts law.

This case underscores the significant legal repercussions companies face when they breach their fiduciary duties and engage in deceptive practices, particularly towards vulnerable consumers.

Source: Reuters, UnitedHealth units ordered to collectively pay $165 million for misleading Massachusetts consumers

Fiduciary Compliance Made Clear: Legal Insights from Tempus Fugit Law

As exemplified above, fiduciary duty breaches effect individuals, businesses and consumers alike. At Tempus Fugit Law, we understand the complexities of fiduciary relationships and the legal obligations they entail. Whether you're an individual seeking justice for a breach that has caused you harm or a business looking to ensure compliance and avoid potential pitfalls, our experienced attorneys can provide the guidance and representation you need. From litigating breaches to advising on best practices, we are dedicated to protecting your interests and upholding the principles of fairness, loyalty and accountability.

Let Tempus Fugit Law help you navigate these challenges with confidence and expertise. Call Tempus Fugit Law at (617) 752-2371, email team@tflawllc.com or contact us here on our website to get started with a consultation today.