Broker Uses Insider Info to Defraud Clients
March 2, 2002
In article by a former attorney at our firm appeared in the March 2002 issue of The Cooperator entitled “Broker Uses Insider Info to Defraud Clients.” The article examined the Department of State’s revocation of a broker’s license for breaching her fiduciary duty and defrauding her client. The broker had partnered with the purchaser without informing her client; she then disclosed her client’s confidential bottom-line price to the purchaser. Here is part of the article:
In the course of representing and negotiating for the interests of their clients, real estate brokers are often privy to sensitive or confidential information. Whether buying or selling, residential or commercial, super-luxe or no-frills space, it’s absolutely crucial that brokers put the interests of their clients first–not only for purely ethical reasons, but to avoid career-killing legal imbroglios like the one that recently ended with a Staten Island broker being stripped of her license.
Under the Real Property Law, the Department of State is responsible for regulating the conduct of real estate brokers. The purpose of state oversight is to protect the public by ensuring the trustworthiness and competence of brokers. If a broker acts fraudulently or otherwise demonstrates untrustworthiness or incompetence, the Department of State can suspend, fine or reprimand the broker. As illustrated by a decision issued late last year in the Matter of Department of State Division of Licensing Services v. Turyan, in extreme cases, the Department of State will even revoke the broker’s license. Read more…
