Conflict Of Interest

AAA

DEFINITION of 'Conflict Of Interest '

A situation where a professional, or a corporation, has a vested interest which may make them an unreliable source. The interest could be money, status, knowledge or reputation for example. When such a situation arises, the party is usually asked to remove themselves, and it is often legally required of them.

INVESTOPEDIA EXPLAINS 'Conflict Of Interest '

An example of a conflict of interest would be a board member voting on the induction of lower premiums for companies with fleet vehicles when he is the owner of a tow truck company outside of the corporation. In relation to law, representation by a party with a vested interest in the outcome of the trial would be considered conflict of interest, and the representation would not be allowed.

RELATED TERMS
  1. Interlocking Directorates

    A common business practice where a member of a company's board ...
  2. Revolving Door

    The movement of high-level employees from public sector jobs ...
  3. Major Fraud Act Of 1988

    A piece of legislation passed during the Reagan administration ...
  4. Fiduciary Fraud

    Illegal practices committed by financial institutions and financial ...
  5. Stuffing

    The act of selling undesirable securities from the broker-dealer's ...
  6. Corporation

    A legal entity that is separate and distinct from its owners. ...
Related Articles
  1. What Investors Can Learn From Insider ...
    Markets

    What Investors Can Learn From Insider ...

  2. Defining Illegal Insider Trading
    Economics

    Defining Illegal Insider Trading

  3. Why Late Trading Is Illegal
    Mutual Funds & ETFs

    Why Late Trading Is Illegal

  4. The Chinese Wall Protects Against Conflicts ...
    Options & Futures

    The Chinese Wall Protects Against Conflicts ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center