Buzz Archive:
Words Matter- Financial Advisors Need to Be Careful Using Form Engagement Letters

by Laurence S. Lese, David J. Kaufman, Heather Carmody and Rosa M. Ertze of Duane Morris LLP, 12/29/2009

Financial advisors may be held liable to third-party beneficiaries for breach of contract and fiduciary duty claims based in part on the specific language in a form public-company engagement letter that was used for a private company transaction. The decision by the U.S. District Court for the District of Massachusetts in Baker v. Goldman Sachs demonstrates that some of the provisions in a form engagement letter designed to protect financial advisors in a public company deal may present distinct risks to the same financial advisors in a private company transaction.

Sound off on this week's buzz in the Comments Section.