Conflict of Interests

A conflict of interests is a situation which occurs when the interests of an entity differ from those of another entity which they are contractually obligated to represent.

For example, an asset manager or an insurance broker may consider recommending a product which is a poor choice for a client because they receive a high commission on the sale of that product. A lawyer may consider providing misleading legal advice to a client if they stand to gain financially from doing so.

Conflicts of interest may also arise when board members or executives of companies stand to gain by making decisions which are harmful to shareholders.

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