The word “fiduciary” derives from the Latin words for “faith” (fides) and “trust” (fiducia). Roman law recognized various fiducia contracts in which a person held property in safekeeping or otherwise acted on another’s behalf. Failure to uphold such trust could result not just in monetary penalties but also a formal “infamy” (infamia), in which you lost such rights as to hold public office or be a witness in a legal case.Whole thing here.
However, the fiduciary idea arose well before Rome. The Code of Hammurabi, carved into stone in ancient Babylon, required a merchant’s agent to keep receipts and to pay triple damages for failing to provide promised goods (though it allowed an exemption if the loss was due to enemy attack during a journey).
Tuesday, June 28, 2011
In the July issue of Research, my article "Fiduciary Matters," on the history behind the current controversy over whether brokers and financial advisors should be held to a uniform fiduciary standard requiring them to put their customers' interests before their own. Excerpt: