Irregularities, Wrongdoings, and Illegalities committed by GreatBanc Trust Company (GBTC), SEI Trust Company, and US Fiduciary Services Inc, (USFS) Exonerate Charles J Dushek
Unjust Prosecution by SEC and DOJ of Charles J Dushek * Prosecutors Must Investigate 5-10 Years of Client Custodial Agreement Violations and State and Federal Regulatory Violations That Betrayed the Trust of Hundreds of Senior-Age Clients.
The Result of Both the SEC and DOJ Persecution of Mr. Dushek, He and His Family Have Had Their Finances Crushed, that Have Been Used for Years to Fund/Support Humanitarian Projects to Help:
“Underemployed U.S. Seniors Via Social-Enterprise Businesses”;
Developing World Children for the “Children Learning to Read to Learn” Project;
“Building Sustainable Concrete Community Buildings in Developing World Adverse-Weather Locations”;
A Project to “Convert Used-Cooking-Oils…Billions of Gallons Per Year… into Safe/Clean Bio-Fuels”;
From Used Cooking Oil…..To Local Process Operations….To Bio-Fuel for Transportation
Contributions to “Operation Smile”…to “Surgically Correct Cleft-Lips” for 85,000 Deformed Children Per Year;
and Our Oldest Charity… UPENDO Village in South Africa…That Engages Youth in Middle-School Education.
[By Awais Bajwa, Attorney at Law * Corporate Law * Fiduciary Law * Securities Law * Supreme Court & Federal Government Law * University of London LLM]
The object of this research article is to narrate the story of Mr. Charles J. Dushek, the former President of Capital Management Associates (“CMA”), an Illinois Registered Investment Advisory (RIA) firm that he established in 2001. He is allegedly one of the many victims of direct and indirect wrongdoings, irregularities and illegalities of two Illinois based entities namely GreatBanc Trust Company (“GBTC”) and US Fiduciary Services Inc. (“USFS”).
At the outset, I want to state that I was invited by Mr. Dushek to do public research on the allegations of wrongdoings committed by GBTC and its parent Firm US Fiduciary Services Inc. (USFS) with regards to GBTC’s violations of State of Illinois Regulations, GBTC Custodial Agreement provisions, ethical violations of Fiduciary Responsibilities and what are called Best Practices of actions, activities, and responsibilities a Corporate Fiduciary should be held morally and ethically accountable for, even if the law is silent on that. Both companies are cited in this article because many employees and officers of GBTC are also employees and officers of USFS so there is a strong presumption that these individuals might have been involved in committing the above-referred irregularities and illegalities.
I was apprised by Mr. Dushek that allegedly GBTC and USFS have violated Terms, Conditions, and Duties by the Agent of the GreatBanc Custodial Agreement (“Custodial Agreement”) which was executed between GBTC (in the capacity of Agent) and over 230 Senior Age Clients (in capacity of Principals) from 2003 to 2013. It is further alleged that GBTC and Parent USFS have Wantonly Violated Illinois Department of Financial & Professional Regulations Code by using unauthorized accounting & bookkeeping practices for client accounts records keeping of securities transactions for client accounts, and misrepresentations (fraud) on the executions of thousands of securities transactions for Clients’ accounts and committing misrepresentations to Principals of Terms, Conditions and Duties of Agent within the GBTC Custodial Agreements, which Agent is legally required to perform under the provisions of the Illinois Department of Financial & Professional Regulations (IDFPR) Code for Illinois Chartered Trust Companies, as GBTC is an Illinois Chartered Trust Company and bound by Illinois Department of Financial & Professional Regulations Code.
- Purpose of this Legal Article and Legal Brief
The outcome of this research Article is to publicly discuss various factual and legal aspects of the alleged irregularities supposedly committed by GBTC and USFS and to evaluate the evidence available on record so as to reach some logical conclusions. This Article is also in aid of defensive arguments and exculpatory evidence facts supporting past and current legal matters of Mr. Dushek, and for “Social Justice Advocacy” for his legal cases to help the General Public understand that even state institutions that do monitoring and enforcement of financial services industries, trust companies, businesses, and persons thereof are also not immune to human errors and omission proclivities of exculpatory evidence discovery & disclosure.
- Historical Background of the Matter
As a matter of record, Charles J. Dushek was prosecuted in 2012 by the Securities and Exchange Commission (“SEC”) for alleged wrongdoings by himself as President of CMA. According to Mr. Dushek, GBTC had commenced a scheme in mid-2008 to employ two dysfunctional securities transactions trading accounts in the name of GBTC known as: “GBTC Delivery Versus Payment (DVP) brokerage account platform” and also introduced the dysfunctional MOXY Advent System for executing client accounts securities transactions, and securities trade allocations of buys and sells to around 230 client accounts on the books of GBTC.
At that time around during mid-2008, allegedly, a noncompliant and illegal act was in process by GBTC, GBTC started directing and demanding that CMA employees utilize/enter client account trades/do the trades allocations/do transactional client bookkeeping entries via the MOXY Advent System, that in fact was a “Front-End” accounting system for the unauthorized MOXY System user(s) to make direct securities buy and sell entries into the custodial accounts of GBTC customers, that were also clients of CMA.
- First Amendment Right of Free Speech
While exercising his First Amendment right of Free Speech, Mr. Dushek wanted to make his information about GBTC’S and USFS’s wrongful doings known to the public, through me, as he believes that he has been victimized by the US Government Agencies. Whereas, as per Mr. Dushek, the SEC and DOJ did not adequately investigate the illegal operating processes of GBTC, which are the conditions present at that time from 2008 to 2013 that made it falsely appear as if Mr. Dushek was the cause of late trade allocations, whereas it was all upon GBTC wrongful doings that trade allocations were chronically late in being recorded into/on the dysfunctional MOXY Advent System.
- CMA Client Agreement Prohibits Short-Term Trading in Client Accounts
Mr. Dushek further noted that every CMA client had executed a “CMA Investment Advisory Agreement” that explicitly prohibited doing nor allowed any short-term trading or day-trading in any client accounts whatsoever pursuant to Article I “Appointment of Investment Manager”, and further expressed in Article 7 “Other Investment Activities”. The following provisions are clearly stated in the CMA Investment Advisory Agreement.
Paragraph 1…Investment Manager is to do only long-term investments into Client accounts.
Paragraph 2…Investment Manager is to do only securities transactions that are in accordance with the Client’s Investment Objective.
Paragraph 3…Custodian (GBTC) provides securities execution services. In no event will the Custodian be obligated to execute any transaction which it believes to be in violation of any State or Federal law or regulation or in violation of the custodian’s regulator.
Paragraph 7…CMA employees may buy, sell or trade in any securities for their respective accounts. Such transactions may differ from the timing or nature of action taken with respect to Client’s account…
Paragraph 8…Investment manager is to act with the care, skill, prudence, and diligence under the circumstances then prevailing (GBTC did not provide CMA and Mr. Dushek with any systematic process to do client account transaction allocations at the time of transaction execution) that a prudent man acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. (Mr. Dushek used his best efforts to comply with any regulations expressed or implied in doing client account allocations within the processes, as inadequately provided by GBTC, to always act in a prudent and credible manner.
Paragraph 11 c …Investment Adviser is properly registered and in compliance with the state laws under which the RIA is under IL-DOS jurisdiction and IL-DOS Regulations.
Paragraph 16…Both parties agree that the representations within the Agreement do not violate any obligation of either party.
Paragraph 17…The validity of this Agreement and of any of its provisions, as well as rights and duties of the parties hereunder, shall be governed by the laws of the State of Illinois.
- Irregularities, Violations, and Illegalities committed by GBTC and USFS
- 5.1 Violation of Financial Regulation (205 ILCS 620/) Corporate Fiduciary Act
It is alleged that GBTC made explicitly written representations in the Custodial Agreements to hundreds of Clients as Principals of said Agreements that have been in effect from 2003 to date. However, GBTC has violated terms and Fiduciary Responsibilities as mandated by the Custodial Agreement. Further that GBTC was obligated to notify IDFPR Commissioner of such deficiencies, violations, operations for 5 Years Running of misconduct that GBTC promised to execute on/deliver to Principals according to IDFPR Code 205 “Financial Regulations 205 ILCS 620/5-2&3” of the Corporate Fiduciary Act for 5 Years Running from 2008 through 2013”. Sub Regulation (e) of Regulation 5-2 of Financial Regulation (205 ILCS 620/) Corporate Fiduciary Act clearly mentions the requirement of notifying monthly the Commissioner as reproduced hereunder:
|(e) Whenever any corporate fiduciary causes to be performed, by contract or otherwise, any fiduciary services for itself, whether on or off its premises:
(1) such performance shall be subject to examination
|(2) the corporate fiduciary shall notify the|
| For purposes of this subsection (e), the term “fiduciary services” shall include such services as the computation and posting of interest and other credits and charges; preparation and mailing of checks, statements, notices and similar items; clerical, bookkeeping, accounting, statistical or similar functions; and any other function which the corporate fiduciary, in the ordinary course of its business, could have performed itself.
Any report of examination pursuant to this Section and any copies thereof shall be the property of the Commissioner, confidential and may only be disclosed under the circumstances set forth in Section 48.3 of the Illinois Banking Act, as now or hereafter amended.
As a matter of law, corporate officers, directors, and controlling shareholders owe a duty, which will be enforced by the court, to the corporation and, through the corporation, to the shareholders. State law generally delineates that duty. The precise definition of that duty is anything but clear. Justice Frankfurter identified the problem best in a frequently quoted passage from SEC v. Chenery Corp. But to say that a man is a fiduciary only begins the analysis; it gives direction to further inquiry. To whom is he a fiduciary? What obligations does he owe as a fiduciary? In what respect has he failed to discharge these obligations? And what are the consequences of his deviation from duty?
Duty of Loyalty issues may arise in the context of a variety of transactions, including the following:
- Sales to or purchases by the corporation from directors or entities in which the directors have an interest;
- Dealings between a parent corporation and its subsidiary;
- Unfair treatment of minority stockholders by a majority stockholder in matters such as corporate acquisitions and reorganization transactions;
- Use of corporate funds to perpetuate control;
- Sale of control;
- Demands of stockholders to commence derivative suits;
- Excessive compensation;
- Insider trading;
- Usurpation of corporate opportunities;
- Competition with the corporation by officers or directors; and
- Improper use of corporate position, property, or information.
- Footnotes ____________________________________________________________________________ See generally In re Reading Co., 711 F.2d 509, 517 (3d Cir. 1983) (holding a majority shareholder has a fiduciary duty to corporation and minority shareholders if majority shareholder “dominates the board of directors and controls the corporation”); Singer v. Magnavox Co., 380 A.2d 969, 977 (Del. 1977) (holding classic definition of the duty of loyalty is equally applicable to both directors and majority stockholders). See also Innes v. Howell Corp., 76 F.3d 702 (6th Cir. 1996); Emery v. American Gen’l Finance, Inc., 71 F.3d 1343 (7th Cir. 1995); Farr v. Farm Bureau Ins. Co. of Neb., 61 F.3d 677 (8th Cir. 1995); Gateway Tech., Inc. v. MCI Telecom. Corp., 64 F.3d 993 (5th Cir. 1995); In re Stat-Tech Int’l Corp., 47 F.3d 1054 (10th Cir. 1995); Industrial Gen’l Corp. v. Sequoia Pacific Sys. Corp., 44 F.3d 40 (1st Cir. 1995); Bigda v. Fischbach Corp., 898 F. Supp. 1004 (S.D. N.Y. 1995), aff’d, 101 F.3d 108 (2d Cir. 1996); In re Insulfoams, Inc., 184 B.R. 694 (Bankr. W.D. Pa. 1995), aff’d sub nom. Donaldson v. Berstein, 104 F.3d 547 (3d Cir. 1997); Pagonis v. Donnelly, 929 F. Supp. 459 (D. D.C. 1995) (holding fiduciary duties of corporation’s officers and directors are determined by law of state of incorporation); Pitman v. Aran, 935 F. Supp. 637 (D. Md. 1996); Regal-Beloit Corp. v. Drecoll, 955 F. Supp. 849, 858 n.3 (N.D. Ill. 1996) (holding corporate laws of state of incorporation are controlling with respect to fiduciary duties of directors as well as other internal corporate affairs); Charles Hansen, et al., The Role of Disinterested Directors in “Conflict” Transactions: The ALI Corporate Governance Project and Existing Law, 45 BUS. L. 2083, 2100 (1990). Regal-Beloit Corp. v. Drecoll, 955 F. Supp. 849, 858 n.3 (N.D. Ill. 1996). 318 U.S. 80, 85 (1949). See Aviall, Inc. v. Ryder System, Inc., 913 F. Supp. 826 (S.D. N.Y. 1996), aff’d, 110 F.3d 892 (2d Cir. 1997); E. Norman Veasey, Duty of Loyalty: The Criticality of the Counselor’s Role, 45 BUS. LAW 2065-66 (1990).
- 5.2 Violating requirement of Fiduciary Duty
Despite the fact that neither CMA nor its employees were an affiliate nor employees of GBTC, GBTC, allegedly, directed them to act on behalf of GBTC in order to do securities trading for clients of GBTC and to do transaction allocations and bookkeeping entries. This was an irregularity as they did not inform the Commissioner of such change whereby it allowed outsiders of GBTC to do trading. Therefore, GBTC apparently violated “Financial Regulations 205 ILCS 620/5-2&3” of the Corporate Fiduciary Act for 5 Years Running from 2008 through 2013. These Violations are subject to Fines by IDFPR Commissioner of $100,000 per violation occurrence that was noted in Reg 205.
According to Sec. 1(1), of Fiduciary Obligations Act, “Fiduciary” includes a trustee under any trust, expressed, implied, resulting or constructive executor, administrator, guardian, conservator, curator, receiver, trustee in bankruptcy, assignee for the benefit of creditors, partner, agent, officer of a corporation, public or private, public officer, or any other person acting in a fiduciary capacity for any person, trust or estate.
Agency may be the most basic fiduciary relationship arising under the law. It serves as the basis for other, more specialized fiduciary relationships such as broker/customer and attorney/client. Agency results from “the manifestation of consent by one person to another that the other shall act on his behalf and be subject to his control, and by the consent of the other so to act.” Among the fiduciary duties imposed on agents as fiduciaries are the duty of full disclosure, loyalty, and faithfulness to the principals.
It was held in Federal Pants, Inc. v. Stocking, 762 F.2d 561 (7th Cir. 1985) that holding agents are subject to the directions of the principal and have duty to use reasonable efforts to give to principal information relevant to affairs entrusted to them. Finding agency is fiduciary relationship and, thus, agent owes a duty to his principal to act in good faith and in accordance with the agency agreement existing between the parties as well as duty to keep and render accounts to the principal of all financial affairs that the agent has handled on behalf of the principal Wilcox v. St. Croix Labor Union Mut. Homes, Inc., 567 F. Supp. 924 (D. V.I. 1983). It was further held in Levin v. Garfinkle, 492 F. Supp. 781 (E.D. Pa. 1980), under Pennsylvania law, an agent owes his principal a strict duty of loyalty and must conduct the principal’s affairs in the utmost good faith.
- 5.3 Illegal use of MOXY Advent System by CMA
As stated by Mr. Dushek, by allowing CMA, an outside firm, to use MOXY Advent System was apparently tantamount to having CMA employees be doing direct securities buys and sell trading for the accounts of Principals, that was prohibited under Article III Para 1 of the Custodial Agreement. The same is reproduced as hereunder:
Article III, Para I
“General Power. Agent shall buy, sell, receive and deliver or otherwise deal with the property deposited hereunder, upon the instructions of Principal, or upon the instructions of an investment Manager duly appointed by Principal”
The above article states that GBTC was authorized to do securities trading among/for accounts of Principals/Clients only on instructions of Principal. However, in this case, GBTC never took any such permission.
Furthermore, it was also apparently prohibited by Code 205 of Illinois Department of Financial & Professional Regulation (IDFPR). The Allocation activities that was demanded by GBTC for CMA to do was also prohibited by Code 205 Sec 2&3, because that Bookkeeping Activity was “native only to the GBTC Corporate Fiduciary ” and could only be permitted if GBTC notified the Commissioner within 30 days of having any Outsider do such activity that was otherwise native to GBTC, so that the Commissioner could “Examine CMA” to determine if CMA could be permitted by IDFPR to be doing these non-contractual, non-paid for activities/services for GBTC. These violations seem to have gone unchecked for 5 to 10 years.
- 5.4 CMA was not a “Custodian”, but GBTC was!
CMA had no authority nor responsibility as a plain RIA to set up DVP securities trading accounts in some compliant and proper fashion to make the SEC happy. CMA Was Not a registered “RIA-Custodian”. Hence, only the Custodian GBTC could set up the parameters of these DVP accounts and GBTC have exclusive responsibility for use of the accounts.
CMA as an RIA firm and not also having the status as a “Custodian” nor a “Broker-Dealer” had no power nor permission to be doing Custodial “native responsibilities/actions” such as doing client accounts trade executions at the client account level, nor to do the block trade allocations entries to the GBTC accounting books via MOXY Advent platform.
GBTC as Agent made the representations within the Custodial Agreement of having single full control and responsibility for conducting transaction executions for Accounts of Principals from instructions of the Investment Manager to Agent, with no other exceptions nor provisions noted anywhere in the said Custodial Agreement that empowered Agent to delegate the transaction executions actions to no one else. GBTC clearly violated the Custodial Agreement. Whereas Charles Dushek was a Principal of the Custodial Agreement, he was not authorized by the Agreement terms to ever execute any transactions, even for his own personal accounts,
Agent, GBTC, had full control over the transaction executions process to include both the MOXY Trade Executions Platform and the GBTC DVP Accounts platform, and coincident to that authority and responsibility, had responsibility to have set up a protocol within the GBTC DVP accounts as they established said accounts in 2003 and thereafter to require any Investment Manager of these MOXY and DVP accounts to enter a notation if the transaction information from Investment Manager to Agent GBTC was a trade for Personal or Third-Party Client Accounts, and to then have the Trader (Agent GBTC) be able to view within the informational field of a MOXY or DVP Account block trade set up, done by Investment Manager, the list of Client Account Numbers and allocation quantities of the block trade to each and every Principal’s Accounts prior to Agent, GBTC, doing the actual execution of every trade.
- 5.5 Violation of the Illinois Department of Financial & Professional Regulations
GBTC is regulated by the Illinois Department of Financial & Professional Regulations. There is no Regulation that allows a Trust Company custodian to direct or delegate the bookkeeping functions to any non-employee of the Trust Company nor to any unaffiliated firm or organization of the Trust Company. Whereas, GBTC delegated and directed CMA, its employees and Mr. Dushek to make not only direct client account transactions into client accounts, but also directed and facilitated a non-compliant trade allocations system known as MOXY Advent for CMA to utilize that gave over “direct entry securities trading and client account transaction bookkeeping functions” to CMA. Whereas GBTC was in violation of Illinois Department of Financial & Professional Regulations: Trusts and Fiduciaries (760 Ilcs 5/) Trusts and Trustees Act. and Financial Regulation (205 ILCS 620/) Corporate Fiduciary Act.
It was further revealed by Mr. Dushek that GBTC had full access to view any and all trades being placed to brokerage accounts by simply logging into the brokerage account admin platform with their USER ID and Password to observe and supervise any/all trades on a real-time basis every day. Mr. Dushek further explained that the general usage operations of these brokerage accounts were known about by IL DOS regulators and CMA employees. GBTC officers and employees also knew about the usage operations, and that GBTC never created nor installed any electronic or digital interface between the GBTC DVP brokerage account trade executions information to be immediately propagated or recorded into the account allocations system for GBTC for Client Accounts accounting/bookkeeping. This condition of GBTC directing and authorizing CMA to execute its own client trades explicitly indicates that GBTC knew they were in violation of their own GBTC Custodial Agreement Article III.
- 5.6 Allegations of Misrepresentations and Breach of Trust on GBTC
All provisions of the GBTC Custodial Agreement are representations of what GBTC promised customers in doing many services for them, and within the IDFPR Code. When a Trust Company makes these Agreement Representations and then breaches (violates) them that is a violation of the IDFPR Regulations also, because Trust companies are to honor and perform on all Agreements they make with their customers, so GBTC has double-violations when we utilize these requirements. So, when GBTC violates its GBTC Custodial Agreement, it would simultaneously be violating IDFPR Regulations. When a “Representation” is made to a Principal and is not honored in the Agreement, it is then a “Misrepresentation” or willful fraud.
If we believe at the facts as presented before us, it seems as if GBTC committed a breach of trust. Breach of trust is a trustee’s failure to act in accordance with the terms of the trust or the trustee’s general fiduciary obligations. Whether or not the violation was willful, fraudulent, negligent, or inadvertent, a trustee is said to have committed a breach of trust if a duty imposed on him/her by equity was violated.
- 5.7 Bogus Transaction Posting Fees
GBTC allegedly charged bogus transaction posting fees to 230 Clients to over 400 accounts for 5 years, whereby CMA employees did all those accounting entries via the MOXY Advent System, that GBTC delegated/demanded that CMA do on behalf of GBTC that violated Section 205, Para 2 & 3 and provisions of the GBTC Custodial Agreements namely Article III, Para 5.
- 5.8 Negligent Actions & Inactions & Agreement Violations of GBTC
The apparent trade execution violations by GBTC looks to have been a knowingly negligent or inappropriate trading process set up by it to not have linked client account(s) allocations information and trade execution information flows into its proprietary accounting and allocation bookkeeping processes, while GBTC was to do all client securities buy and sell transaction executions.
As required under Article III Paragraph 5 Records, GBTC failed to maintain accurate records and accounts of all transactions of the Account (Principal’s Accounts). Agent ran an inferior transaction execution information and an inferior account allocations bookkeeping system.
Further as required under Article VI Paragraph 2 Degree of Care, GBTC failed to keep Custodial services of care, skill, prudence and diligence as to how a prudent person should act in not utilizing a credible securities trading execution and client account(s) trade allocation bookkeeping system.
Further under Article VI Paragraph 12 Successors and Assigns, GBTC assigned all the Provisions of this Agreement to SEI Trust Company, which included all trade execution processes that were inferior to Best Practices of a compliant Trust Company, thereby making SEI Trust Company a culpable partner of GBTC in all wrongdoings and violations of Agent within the Agreement.
In summary, this Article and Legal Brief has presented detailed, fact-checked and document references evidence of prima-facie wrongdoings by GBTC to several hundred CMA senior age individual clients, to husband and wife clients, and to retiree clients that have been wrongfully billed and had fee deductions taken by GBTC that can be in the thousands of dollars per each client account for the 5-year period from 2008 to 2013. If these charges are proved, GBTC may face legal action including restitution in terms of IDFPR Penalties; Sanctions and Fines; possible SEC charging of GBTC for fraud and misrepresentation to customers in securities transactions as many clients were in States outside of Illinois; possible criminal charging by Illinois State Attorney’s Office; and civil damage lawsuits by 230 custody clients of GBTC, 230 client plaintiffs of CMA and of Mr. Dushek who was a GBTC Custodial Agreement Client (Principal).
[By Awais Bajwa, Attorney at Law * Corporate Law * Fiduciary Law * Securities Law * Supreme Court & Federal Government Law * University of London LLM]
Researcher & Legal Brief Writer
For Judicial Justice for US Citizens
 See generally In re Reading Co., 711 F.2d 509, 517 (3d Cir. 1983) (holding a majority shareholder has a fiduciary duty to corporation and minority shareholders if majority shareholder “dominates the board of directors and controls the corporation”); Singer v. Magnavox Co., 380 A.2d 969, 977 (Del. 1977) (holding classic definition of the duty of loyalty is equally applicable to both directors and majority stockholders). See also Innes v. Howell Corp., 76 F.3d 702 (6th Cir. 1996); Emery v. American Gen’l Finance, Inc., 71 F.3d 1343 (7th Cir. 1995); Farr v. Farm Bureau Ins. Co. of Neb., 61 F.3d 677 (8th Cir. 1995); Gateway Tech., Inc. v. MCI Telecom. Corp., 64 F.3d 993 (5th Cir. 1995); In re Stat-Tech Int’l Corp., 47 F.3d 1054 (10th Cir. 1995); Industrial Gen’l Corp. v. Sequoia Pacific Sys. Corp., 44 F.3d 40 (1st Cir. 1995); Bigda v. Fischbach Corp., 898 F. Supp. 1004 (S.D. N.Y. 1995), aff’d, 101 F.3d 108 (2d Cir. 1996); In re Insulfoams, Inc., 184 B.R. 694 (Bankr. W.D. Pa. 1995), aff’d sub nom. Donaldson v. Berstein, 104 F.3d 547 (3d Cir. 1997); Pagonis v. Donnelly, 929 F. Supp. 459 (D. D.C. 1995) (holding fiduciary duties of corporation’s officers and directors are determined by law of state of incorporation); Pitman v. Aran, 935 F. Supp. 637 (D. Md. 1996); Regal-Beloit Corp. v. Drecoll, 955 F. Supp. 849, 858 n.3 (N.D. Ill. 1996) (holding corporate laws of state of incorporation are controlling with respect to fiduciary duties of directors as well as other internal corporate affairs); Charles Hansen, et al., The Role of Disinterested Directors in “Conflict” Transactions: The ALI Corporate Governance Project and Existing Law, 45 BUS. L. 2083, 2100 (1990).
 Regal-Beloit Corp. v. Drecoll, 955 F. Supp. 849, 858 n.3 (N.D. Ill. 1996).
 318 U.S. 80, 85 (1949).
 See Aviall, Inc. v. Ryder System, Inc., 913 F. Supp. 826 (S.D. N.Y. 1996), aff’d, 110 F.3d 892 (2d Cir. 1997); E. Norman Veasey, Duty of Loyalty: The Criticality of the Counselor’s Role, 45 BUS. LAW 2065-66 (1990).
 RESTATEMENT (SECOND) OF AGENCY § 1 (1958).