In the last decade, the U.S. Supreme Court has taken a much less moralistic and much more market-oriented approach to questions of fiduciary loyalty. In cases involving fiduciaries with conflicts of interest, the Court has shifted the burden of proof to the party claiming unfair treatment, thereby protecting deals and making loyalty harder to enforce. The Court has also struck down or narrowly construed laws designed to prevent disloyalty by fiduciaries on the theory that broad prohibitions on business conduct encroach on constitutionally protected freedoms.
This Article discusses how the Supreme Court’s new approach represents a departure from the Court’s own precedents and from the fiduciary principles still followed by the State courts. The Article also considers how the changes in Supreme Court jurisprudence reflect changing attitudes toward loyalty in this country, particularly among the financial elites.