Contemporary Business Law 8th Edition by Henry Cheeseman

تمرين 1

Fiduciary Duty After Francis Pusateri retired, he met with Gilbert J. Johnson, a stockbroker with E. F. Hutton Co., Inc., and informed Johnson that he wished to invest in tax-free bonds and money market accounts. Pusateri opened an invest­ment account with E. F. Hutton and checked a box stating that his objective was "tax-free income and moderate growth." During the course of a year, Johnson churned Pusateri's account to make commissions and invested Pusateri's funds in volatile securities and options. Johnson kept telling Pusateri that his account was making money, and the monthly statement from E. F. Hutton did not indicate otherwise. The manager at E. F. Hutton was aware of Johnson's activities but did nothing to prevent them. When Johnson left E. F. Hutton, Pusateri's account-which had been called the "laughingstock" of the office-had shrunk from $196,000 to $96,880. Pusateri sued E. F. Hutton for dam­ages. Is E. F. Hutton liable? Pusateri v. E. F. Hutton Co., Inc., 180 Cal.App.3d 247, 225 Cal.Rptr. 526, Web 1986 Cal.App. Lexis 1502 (Court of Appeal of California)