Monday, July 2, 2012
Brian Doherty, a Florida Attorney, offered several services to his clients. Among these services, Doherty sold annuities to his clients. In the summer of 2006, Doherty purchased an annuity for one of his elderly clients. In other words, Doherty acted as a broker for the sale to the client. On this sale, Doherty would receive a 7% commission; however, Doherty did not disclose to the client that he would receive a commission under the sale. The client died before she could purchase the annuity.
In Florida Bar v. Doherty, the Florida Supreme Court found that Doherty violated Florida Rule 4-1.8, which states that an attorney cannot:
"'enter into a business transaction with a client' unless the transaction is fair and reasonable to the client, the attorney discloses to the client in writing of the terms of the attorney’s interest in the transaction and the desirability of the client seeking separate counsel in the matter and the client gives informed, written consent."
More specifically, the court rejected Doherty's argument that he never conducted business with his client because he only acted as a broker to the deal, and that the rule was much broader than Doherty suggested.
See Gregory Monday and John T. Brooks, Attorney Disbarred After Trying to Sell Annuities to Elderly Client, Wealth Management, June 25, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.