Laurna hired Ned to act as her stockbroker.Ned purchased certain stocks on Laurna's behalf and at her specific direction.Ned advised her not to buy them,saying that they were too risky,but she insisted.Because those stocks subsequently dropped in value,Laurna has sued Ned for compensation.Which of the following is TRUE?

Question

Quizplus · Accepted Answer

Ned acted on Laurna's direct instructions and purchased the stocks she wanted, despite advising her not to. As a result, he cannot be held liable for breach of fiduciary duty since he was following Laurna's specific directions. The fact that the stocks subsequently dropped in value does not necessarily mean that Ned breached his duty, as stock prices are subject to fluctuation and are known to be risky. Additionally, the licensing scheme governing stockbrokers does not affect whether Ned breached his fiduciary duty in this case.

Laurna Hired Ned to Act as Her Stockbroker