(plural prudent man rules)
- (law, investment) A standard for the duty of a fiduciary with responsibility over investments.
prudent-man rule - Investment & Finance Definition
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.”