Which remedy is available to deter fiduciaries by returning profits gained from breach?

• A. Injunctive relief.
• B. Punitive damages.
• C. Criminal penalties.
• D. Disgorgement of profits.

Answer: (D)

Disgorgement of profits is the remedy designed to deter fiduciaries by stripping them of the gains earned through a breach. The core idea is that the wrongdoer should not be allowed to keep the profits that flowed from violating loyalty or care, so the profits are surrendered to the beneficiaries or the company. This emphasizes preventing future breaches by removing the financial incentive to engage in self-dealing or other fiduciary misconduct. It’s an equitable remedy distinct from compensatory damages, which aim to compensate harms rather than deprive the wrongdoer of gains. Other options don’t fit the deterrence goal as directly: injunctive relief stops ongoing or future breaches but doesn’t automatically recover profits; punitive damages punish but aren’t typically available for fiduciary breaches in civil cases; criminal penalties are criminal sanctions, not civil remedies, and address different kinds of wrongdoing. In practice, disgorgement ensures the fiduciary does not profit from the breach, reinforcing proper fiduciary behavior.