Valenti Hanley PLLCLouisville Business Law Attorney | Lexington KY Business Litigation Lawyer | Kentucky Contract Dispute Attorney2026-07-07T12:49:34Zhttps://www.vhrlaw.com/feed/atom/WordPress/wp-content/uploads/sites/1500921/2020/07/cropped-vh-site-icon-512px-32x32.pngOn Behalf of Valenti Hanley PLLC<![CDATA[Can an investment advisor get you involved in insider trading?]]>https://www.vhrlaw.com/?p=493162026-04-13T13:14:48Z2026-04-16T13:13:46ZPeople who have a fair amount of money to invest look for an investment advisor who can navigate them through the twists and turns of the economy, stock and bond markets and U.S. dollar fluctuations. They want professionals who can foresee upcoming changes as much as possible.
When someone acts on information that was not supposed to be shared, however, that can be considered “insider trading.” The “tipper” (the person who shares the information) and the “tippee” (the person who receives and acts on the information) can both face serious criminal charges.
What kind of information is illegal to share?
Insider trading doesn’t involve just any information. It must be material nonpublic information (MNPI). Further, the tipper typically must be aware that they’re breaching their fiduciary duty by sharing that information with someone who isn’t authorized to have it.Finally, the tipper must be sharing the MNPI for some type of personal benefit. For example, maybe a broker wants a client to invest in a particular company or stock, so they disclose information they have about an upcoming acquisition or merger, a new product or something bad that’s about to befall a leading competitor. The “personal benefit” element is critical when it comes to criminal liability. This is referred as the Dirks test – named for a U.S. Supreme Court case. The personal benefit doesn’t have to be monetary. Some unethical investment professionals share MNPI simply to impress others or in expectation of receiving an insider tip in return.
Can a tippee be charged with insider trading for receiving the information?
If a client receives MNPI, understands that it’s information they shouldn’t have and directs their advisor to make a purchase or trade based on it, they can find themselves charged with insider trading. Even if they don’t act on it but share it with someone else, that can still be considered insider trading. That’s because once they’ve received the information, they have assumed a fiduciary duty to guard it. What a person who isn’t an investment professional knew or should have known about the confidentiality of a piece of information can be key to a criminal case. The best way to avoid problems if someone receives MNPI may be to cut ties – at least as a client or a business colleague – with that person and remove any assets from under their control. If it’s a friend or relative sharing insider information, that can be trickier. Whatever the situation, it’s smart to get early and experienced legal guidance.
]]>On Behalf of Valenti Hanley PLLC<![CDATA[Investment advisors must respect your risk tolerance]]>https://www.vhrlaw.com/?p=493142026-03-30T09:21:24Z2026-04-02T09:20:43ZDetermining how to invest money isn’t always an easy task. Many individuals opt to work with an investment advisor to set up a plan and keep it moving in the right direction. There are many factors that these advisors have to consider. One of these is your risk tolerance.
Risk tolerance is a core concept in investing that reflects how much potential loss you’re comfortable accepting. This is typically assessed through various factors, including financial disclosures, questionnaires and conversations. It’s critical that the advisor balances your risk tolerance with growth potential when trying to determine how to handle investments.
What happens when risk tolerance isn’t respected
Investment advisors should make recommendations to you that are aligned with your financial goals and risk tolerance. Regulatory framework emphasizes that these recommendations must be reasonable and tailored to your situation, including your investment timeline. When risk tolerance isn’t considered, there’s a chance that you might be encouraged to make investments that lead to a loss you aren’t comfortable with. While it’s true that loss is possible with any investment, the magnitude of the loss might be considerable, and it likely could have been avoided if the advisor had remained in line with your known risk tolerance. It’s critical that you keep an eye on how your investment portfolio is being handled. This gives you a chance to act if you notice anything amiss, including your advisor taking risks that you aren’t comfortable with. All investment advisors have a fiduciary responsibility to their clients. This means that they must do what’s in their client’s best interests and not their own. If your investment advisor isn’t meeting their fiduciary duty to you, it might be best to work with someone who’s familiar with these matters so you can determine how to move forward. ]]>On Behalf of Valenti Hanley PLLC<![CDATA[Did a business partner snipe a contract for personal benefit?]]>https://www.vhrlaw.com/?p=493112026-03-16T08:37:14Z2026-03-19T08:36:38ZSecuring a new contract with another company can require months of negotiations and careful preparation. Growing businesses may invest heavily in competing for a contract with an outside party.
When the time comes to sign the final agreement, everything may fall apart with minimal prior warning. In some cases, a business partner disappointed by a contract that never materialized may eventually learn that their partner interfered with the organization's contract acquisition. If they have an interest in another business or a professional practice, they may have acquired the opportunity for themselves at the expense of the business. That misconduct might necessitate litigation to terminate the partnership and address the losses generated.
Tortious contract interference is actionable
Intentionally interfering in business operations for personal gain can constitute a business tort. While there are no rules outright preventing business executives and partners from seeking opportunities for other businesses in which they have invested or a professional practice, they should not use their position within an organization to gain insight or leverage. They also need to avoid acts that breach their fiduciary duty to the company. The decision to intervene in a contract almost secured for the company for personal gain can constitute an actionable breach of fiduciary duty and a serious business tort. Partners frustrated when they discover that someone they trusted undermined their company's success may need to take legal action in response. Reviewing the investments made to secure a contract and the conduct of their partner can help remedy the situation and prevent future breaches of duty that could further harm the organization. Business litigation to resolve the dispute may be the best option available. ]]>On Behalf of Valenti Hanley PLLC<![CDATA[Did a seller hide land issues that reduce an investment’s value?]]>https://www.vhrlaw.com/?p=493072026-03-02T06:54:23Z2026-03-05T06:53:39ZLand-related investment fraud is common
The history of property misrepresentations as a form of investment fraud is long and storied. For example, there are cases of sellers duping investors with Florida swampland going back roughly a century.
Other times, properties may be subject to easements or may have environmental contamination that makes them all but unusable. The presence of groundwater or endangered species can also limit the use and value of unimproved land. Even nearby businesses, ranging from chemical facilities to large farming operations, can limit the use and resale value of real estate holdings.
Investors manipulated and tricked by sellers who misrepresented the condition or value of real estate can potentially take legal action after discovering the fraud that occurred. Not reviewing marketing materials, seller disclosures and current information about the property can help frustrated investors pursue justice. With legal support, recouping lost investment capital is sometimes possible.]]>On Behalf of Valenti Hanley PLLC<![CDATA[3 signs of a shareholder freeze-out in progress]]>https://www.vhrlaw.com/?p=493042026-02-17T06:21:51Z2026-02-20T06:20:57Z1. Missed notification of shareholder meetings
Shareholders should receive advance notice of meetings so that they can ensure that they can attend. In cases where shareholders do not receive notice about meetings in advance or where they receive inaccurate information, that could indicate an attempt to deprive them of their rights.
2. Omission from critical votes
In some cases, there may be attempts to subvert the rules governing shareholder voting rights. Private meetings only attended by certain shareholders could lead to some shareholders losing their opportunity to vote on critical matters. Intentional omission from the voting process during meetings could also serve as a warning sign of attempts to push out certain shareholders.
3. Failure to provide dividends
In some cases, shareholders may not receive the dividend checks that they deserve despite the company generating profits. The goal may be to create frustration or to undermine the perception of the investment as a valuable one.
Shareholders should have the option of selling their shares, but they should not have to face manipulative attempts to force them into selling their holdings in the company. Those facing a potential freeze-out or similar shareholder controversies may need assistance asserting their rights, and that’s okay.]]>On Behalf of Valenti Hanley PLLC<![CDATA[How can marijuana be legal in a state but still a federal crime?]]>https://www.vhrlaw.com/?p=493012026-02-02T07:30:09Z2026-02-05T07:29:19ZThe marijuana industry exists in a strange legal environment. In many states, cannabis businesses operate openly, employ thousands of people and contribute significant tax revenue to local economies.
At the same time, those same businesses exist under a cloud of federal prohibition. This tension shapes everything from daily operations to long-term growth, often in ways that aren’t obvious at first glance.
The federal-state divide and why it matters
Under federal law, marijuana remains classified as a Schedule I controlled substance. That classification places it alongside drugs considered to have no accepted medical use, such as heroin or bath salts. This makes its manufacture, sale and distribution illegal nationwide. State legalization does not override that federal status; it simply reflects a choice by individual states not to enforce their own criminal laws against marijuana-related activity.This disconnect creates real risk. Federal authorities generally take a hands-off approach in states with strong regulatory systems, but that discretion is policy-based, not guaranteed by statute. A shift in enforcement priorities or political leadership can quickly change the landscape, leaving compliant state businesses exposed to federal consequences.Banking is one of the most visible pressure points. Because federally regulated banks must comply with federal anti–money laundering laws, many refuse to serve cannabis businesses at all. As a result, companies that are otherwise legal under state law often operate largely in cash, increasing security risks and complicating payroll, tax compliance and lending.Interstate commerce adds another layer of complexity. Even if marijuana is legal in two neighboring states, transporting cannabis across state lines remains a federal offense. The U.S. Constitution gives the federal government authority over interstate commerce, which means state legalization stops at the border. This restriction limits scalability, distribution efficiency and the ability to build multi-state supply chains common in other industries.The result is a legal environment where compliance requires navigating overlapping and sometimes conflicting rules. Businesses must satisfy strict state licensing and regulatory requirements while remaining mindful of federal laws that technically prohibit their core activity.For anyone operating in or investing in the cannabis space, understanding these risks is not optional. Careful planning and informed guidance can help identify vulnerabilities, structure operations thoughtfully and adapt as the law continues to evolve. A conversation with a legal professional can be an important step toward protecting what you’ve built and preparing for what comes next.]]>On Behalf of Valenti Hanley PLLC<![CDATA[What does it mean when a party breaches a contract?]]>https://www.vhrlaw.com/?p=493002026-01-20T07:09:50Z2026-01-23T07:09:09ZContracts are the backbone of business projects, and it’s critical that both parties understand exactly what they’re agreeing to. Contract terms are customized based on what’s needed for a specific project, so it’s highly unlikely that a standard contract will be suitable for most situations.
Once the contract is received by both parties, they should review it fully before signing it. Once it’s signed by both parties, it’s legally binding. This means that if either party fails to uphold their end of the terms, they are breaching the contract and can face legal consequences.
Contract breaches vary greatly
Contract breaches vary in severity, based on the reason for the breach and the way it affects the non-breaching party. There should be penalties listed in the contract that outline what penalties the party will face if they don’t meet their side of the agreement. In some cases, terms of the contract may prevent a party from facing consequences if the contract is breached for a reason they can’t control. This is present if there’s a force majeure clause, which usually covers situations that the party can’t control. An example of this would be if a natural disaster occurs that prevents the completion of the contract as stated. When a contract breach occurs, it’s sometimes possible that both parties may agree on modifications to the contract. This may mean extending the completion date for the project or adjusting the final delivery requirements. It’s critical to understand exactly what the contract requires and how breaches should be handled. Working with someone familiar with these matters can be beneficial, particularly if anything goes wrong during the project. ]]>On Behalf of Valenti Hanley PLLC<![CDATA[Potential benefits of using employment contracts]]>https://www.vhrlaw.com/?p=492982026-01-05T10:07:28Z2026-01-08T10:06:59ZAs a business owner, you get to determine how you want to hire employees to work at the company. In many cases, they are just at-will employees. They have an agreement to work at the company, and they have probably signed some onboarding documentation, but they do not have an official employment contract. Instead, they just work at the business for as long as both of you want that relationship to continue.
But if you want to have more control over these employee relationships, you can introduce employment contracts. What are some of the potential benefits of doing so?
Advance notice when an employee leaves
For one thing, at-will employees do not technically have to give two weeks’ notice before they quit. That is not a legal obligation. It is often considered good business etiquette, but that does not mean an employee is required to do so.However, if you use an employment contract, you can specify how much notice they have to provide. This can help things go much more smoothly for your business if you have to bring on new employees to replace those who are leaving.
Using noncompete agreements
Likewise, an at-will employee can quit their job at any time and go work for the direct competition. You have no say in what they do after their employment ends.But the FTC recently vacated its ban on noncompete agreements, so you can use these documents to stipulate where employees can work after they quit. For instance, you may be able to mandate that they cannot work for direct competitors in the same area as your business or for a set amount of time after they leave their job.In other words, employment contracts simply give you a far greater level of control, which can be very beneficial. It is important to know exactly what legal steps to take when setting them up.]]>On Behalf of Valenti Hanley PLLC<![CDATA[When self-dealing damages a business partnership]]>https://www.vhrlaw.com/?p=492932025-12-22T08:05:44Z2025-12-25T08:04:57ZWhat constitutes self-dealing?
Typically, businesses looking into vendors or service providers get quotes or estimates from multiple parties. They make decisions based on the quality of services or goods, as well as the estimated price. Self-dealing undermines that process by awarding contracts to a business that has a connection to one of the partners or someone in their inner circle, such as a spouse.
Self-dealing can result in the company receiving lower-quality services or goods. Acts of self-dealing can also lead to the company overpaying for goods or services that the organization could have received more cheaply elsewhere.
How do people address self-dealing?
Self-dealing is a breach of fiduciary duty because it involves putting personal enrichment ahead of what is best for the company. In some cases, self-dealing may allow one partner to invoke the terms of a buy-sell agreement. Other times, litigation may be necessary to address the matter and recover the capital lost due to the inappropriate decisions of one business partner.
Those who suspect self-dealing may need to review the situation carefully with a skilled legal team and document their concerns. Reading contracts and reviewing documentation with the guidance of a business law attorney can help concerned business partners assert themselves when they’re facing financial misconduct from a partner.]]>On Behalf of Valenti Hanley PLLC<![CDATA[Holding a business partner accountable for self-dealing]]>https://www.vhrlaw.com/?p=492892025-12-08T02:41:48Z2025-12-12T02:40:47ZHow can a lawsuit help?
Litigation may lead to a review of business records and the partnership agreement. The partner accused of self-dealing may be able to explain the situation. However, if the evidence shows that they breached their fiduciary duty to the organization and their contractual obligations to their partner, then there could be consequences.
The courts could declare the partner responsible for the financial impact of their self-dealing. The plaintiff partner or the organization could receive damages based on the losses generated. A significant breach of fiduciary duty could warrant the removal of a partner from an executive role.
In fact, it could provide the basis for a buyout. It may be possible to remove the partner from the company and allow the other partner to acquire their interest in the organization. The courts could also potentially issue injunctions preventing transactions connected to self-dealing, thereby protecting the organization from continued losses.
Reviewing the records of self-dealing and other relevant business documents with a skilled legal team can help frustrated partners explore their options. A successful partnership lawsuit can lead to financial compensation and the end of a partnership with a person who has breached their fiduciary duty.]]>