prudent man rule

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prudent man rule

n. the requirement that a trustee, investment manager of pension funds, treasurer of a city or county, or any fiduciary (a trusted agent) must only invest funds entrusted to him/her as would a person of prudence, i.e. with discretion, care and intelligence. Thus solid "blue chip" securities, secured loans, federally guaranteed mortgages, treasury certificates, and other conservative investments providing a reasonable return are within the prudent man rule. Some states have statutes which list the types of investments allowable under the rule. Unfortunately, the rule is subjective, and some financial managers have put funds into speculative investments to achieve higher rates of return, which has resulted in bankruptcy and disaster as in the case of Orange County, California (1994). (See: fiduciary, trustee)

References in periodicals archive ?
military presence has benefited the nation, saying, ''It is a historical fact that for the 27 years Okinawa had been under American rule, the economy of Japan had greatly prospered in peace.
Although the rules vary from state to state, generally most states follow one of two rules: the American rule or the English rule.
Under the American rule, the settlement is unbiased, but under the English rule the settlement favors the party that has a higher probability of obtaining favorable evidence, thus tilting the outcome away from a fair allocation.
Discontent with American rule spawned labor unrest and a strong nationalist movement.
Court's analysis of the American rule, the decision could
What is important for present purposes is that the American rule, by allowing liberal disinheritance of children, creates the type of plaintiff who is most prone to bring these actions.
Descendants still tell how the bell rang that day and "everyone within earshot" instantly became an American citizen - ironic in a town founded by Mexicans fleeing American rule after the Mexican War.
However, Campos points out that, even if the chances of prevailing with CFIUS are small, due process is an extremely valuable right to any foreign investor and is one of the hallmarks of the universally admired American Rule of law.
Cohen (no affiliation given) examines the role of American Rule in the US legal system, noting the statutory exceptions to this legal concept that prohibits the collection of legal fees from a prevailing litigant.
American rule, he notes, also brought the introduction of traditional American attitudes toward Indians--that they were hostile, treacherous, and an impediment to progress and civilization.
US officials in Washington have said repeatedly that no centralised Iraqi resistance to American rule remains.
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