Was it reasonable for you to take the 87-year-old heiress' inheritance and invest it all in venture capital funds?
She had $8 million to her name; you put $7 million in VC. So let's think about this. Was it reasonable? Was it reasonable, given that the heiress had life expectancy of 89? So she had, like...two years left. And you put her into funds that don't really even begin to pay back cash or stock (like post-IPO or sale) distributions for at least 5 years?
Answer: no. Not at all. It was not even remotely reasonable. Total bonehead move on your end. You'd get sued for misfeasance. And lose.
There is a generic reasonableness standard that's just...out there. Peer review usually determines its dotted line edges and defines "reasonable."
Related or Semi-related Video
Finance: What does it mean to have fiduc...51 Views
Finance a la Shmoop! What does it mean to have fiduciary obligation? Alright well
fiduciary refers to the responsible person, who has oversight, above a given
financial transaction, or process. That is, it is the fiduciary obligation, of the
head of a corporation's Audit Committee, to be certain that the
accounting process is handled fairly, objectively, inclusively and thoroughly [boss overseeing worker]
and there are a few other ly's in there, but well you get the gist. Doesn't it
seem strange, that some companies just seem to get into the same kind of
trouble again and again. Remember the BP oil spill, well it wasn't the first time
they'd had, an accident. You know, if you can call that spill only an accident.
What kind of oversight did they have? Any? Well some companies just have a [man carrying oil barrel
corporate culture that's run by the notion, that well, whatever isn't caught
as a crime, is legal. Lots of Wall Street stock brokerages came and went this
way. Yah, remember the Wolf of Wall Street? Kind of like that. Well what is
the obligation of a responsible party when faced with ethical dilemmas? Where
does the obligation start and stop? Should fiduciaries be held to a higher
personal standard than normal people? Yah, kind of the, you know, Harvey
Weinstein effect there. Yes, No, maybe, alright. Right, all three times. [question ABCD chart]
It's definitely yes, no, or maybe.
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