prudent-man rule

prudent-man rule definition - finance
A legal securities standard that asks the question “What would a prudent man do?” in order to determine whether an action was reasonable or whether it violated fiduciary duties. The legal standard originated in 1830 when Judge Samuel Putnum wrote, “Those with responsibility to invest money for others should act with prudence, discretion, intelligence and regard for the safety of capital as well as income.”

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.