Nonwaivable Investment Advisers Act Fiduciary Duties and the Bar on Unjust-Enrichment Recovery for Services Tethered to a Void Advisory Contract

1. Introduction

In Tenor Capital Partners, LLC v. GunBroker.com, LLC (11th Cir. Apr. 10, 2026) (unpublished), GunBroker.com, LLC (“GunBroker”) retained Tenor Capital Partners, LLC (“Tenor”) to provide staged services related to establishing an employee stock ownership plan (ESOP): (i) valuation/structuring (“stage one”), (ii) a financing raise (“stage two”), and (iii) closing (“stage three”). The contract included (a) a fee provision tied to transactions with lenders sourced through Tenor, (b) severability language, and (c) an express disclaimer that nothing in the agreement would “be deemed to create a fiduciary or agency relationship.”

After Tenor provided valuation and related advice without registering as an investment adviser, the relationship broke down. GunBroker sued asserting, among other claims, violations of the Investment Advisers Act of 1940 and the Georgia Securities Act, and breach of fiduciary duty. Tenor counterclaimed, including unjust enrichment for the value of its stage-two fundraising work.

The appeal presented three central issues: (1) whether Tenor could rely on a contractual fiduciary-duty disclaimer to defeat a fiduciary-duty claim where fiduciary duties are imposed by the Investment Advisers Act; (2) whether Tenor could invoke a Georgia investment-adviser registration exemption late in the case (in response to reconsideration) without pleading it as an affirmative defense; and (3) whether Tenor could recover in unjust enrichment for stage-two services after rescission/voidness stemming from illegal stage-one investment-adviser activity.

2. Summary of the Opinion

  • Breach of fiduciary duty: Reversed summary judgment for Tenor. The court held that because Tenor acted as an “investment adviser” (a point Tenor did not challenge on appeal), it owed nonwaivable fiduciary duties under the Investment Advisers Act; a contract disclaimer cannot waive statutory compliance obligations. Those federal duties can supply the “fiduciary duty” element for a Georgia breach-of-fiduciary-duty claim.
  • Georgia Securities Act: Affirmed summary judgment for Tenor. Even assuming the Georgia registration exemption is an affirmative defense, the district court could consider it because GunBroker had notice and suffered no prejudice; Tenor raised the exemption when the issue first became live (after the district court’s sua sponte exemption ruling).
  • Unjust enrichment: Reversed denial of judgment as a matter of law and directed judgment for GunBroker. The agreement was void under 15 U.S.C. § 80b-15(b) because it “involves” an Investment Advisers Act violation, and Tenor’s stage-two “benefit” depended on and incorporated the unlawful stage-one valuation/advice, barring quantum meruit/unjust enrichment recovery under Georgia law.

3. Analysis

3.1. Precedents Cited

A. Fiduciary duty under the Investment Advisers Act and nonwaivability

  • Transamerica Mortg. Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11 (1979) (quoting Santa Fe Indus., Inc. v. Green, 430 U.S. 462 (1977)): Used to frame § 206 as establishing “federal fiduciary standards” governing investment advisers’ conduct.
  • SEC v. Cap. Gains Rsch. Bureau, Inc., 375 U.S. 180 (1963): Provided the substantive content of the adviser’s fiduciary obligations—utmost good faith, full and fair disclosure of material facts, and reasonable care.
  • Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006): Cited for the proposition that § 206 applies to “any investment adviser—registered or not,” supporting that fiduciary duties attach even absent registration.
  • Georgia fiduciary-duty framework: Ray v. Hadaway, 811 S.E.2d 80 (Ga. Ct. App. 2018) (elements); Douglas v. Bigley, 628 S.E.2d 199 (Ga. Ct. App. 2006) and O.C.G.A. § 23-2-58 (fiduciary/confidential relationships; duties “created by law, contract, or facts”). The Eleventh Circuit used these to show that Georgia law recognizes duties created “by law” and that such duties can ground a Georgia fiduciary-duty claim.
  • Federal-law-as-duty-source in Georgia tort claims: Wells Fargo Bank, N.A. v. Jenkins, 744 S.E.2d 686 (Ga. 2013); PNC Fin. Servs. Grp., Inc. v. Gibson, 901 S.E.2d 331 (Ga. Ct. App. 2024); McLain v. Mariner Health Care, Inc., 631 S.E.2d 435 (Ga. Ct. App. 2006); Dupree v. Keller Indus., Inc., 404 S.E.2d 291 (Ga. Ct. App. 1991). These authorities were invoked to justify treating a federal statute’s ascertainable standard of conduct as a “duty created by law” under Georgia doctrine.

B. Late-raised exemptions and affirmative defenses

  • Notice/no-prejudice rule: Grant v. Preferred Rsch., Inc., 885 F.2d 795 (11th Cir. 1989) (purpose of Rule 8(c)); Hassan v. U.S. Postal Serv., 842 F.2d 260 (11th Cir. 1988) (no prejudice where notice otherwise provided); Miranda de Villalba v. Coutts & Co. (USA) Int'l, 250 F.3d 1351 (11th Cir. 2001) (court may consider unpleaded defense if no prejudice); Latimer v. Roaring Toyz, Inc., 601 F.3d 1224 (11th Cir. 2010) (general waiver rule). These cases supplied the governing procedural standard: the key question is prejudice, not formal pleading alone.
  • Securities exemptions as affirmative defenses (by analogy): SEC v. GenAudio Inc., 32 F.4th 902 (10th Cir. 2022); Doran v. Petroleum Mgmt. Corp., 545 F.2d 893 (5th Cir. 1977). The court used these to acknowledge the general securities-law pattern, while declining to decide whether Georgia treats the exemption identically.
  • Pending Supreme Court clarification noted: Younge v. Fulton Jud. Cir. Dist. Att'y, No. 25-352, ___ S. Ct. ___, 2026 WL 858458 (U.S. Mar. 30, 2026) (certiorari granted on whether “good cause” is required under Rule 6(b)(4) to add an unpleaded defense at summary judgment, or whether lack of prejudice suffices). The Eleventh Circuit concluded the outcome would be unchanged because both were satisfied on these facts.

C. Illegality, severability, and unjust enrichment/quantum meruit in Georgia

  • Basic unjust enrichment elements and definition: St. Paul Mercury Ins. Co. v. Meeks, 508 S.E.2d 646 (Ga. 1998) (quoting Engram v. Engram, 463 S.E.2d 12 (1995)); elements: Campbell v. Ailion, 790 S.E.2d 68 (Ga. Ct. App. 2016) (citing Crook v. Foster, 775 S.E.2d 286 (Ga. 2015)).
  • Public-policy bar and “intrinsically illegal” transactions: Remediation Servs. v. Ga.-Pac. Corp., 433 S.E.2d 631 (Ga. Ct. App. 1993) (unjust enrichment barred when contract void in totality); JR Constr./Elec. v. Ordner Constr. Co., 669 S.E.2d 224 (Ga. Ct. App. 2008) (quoting Sapp v. Davids, 168 S.E. 62 (Ga. 1933)) (cannot recast an illegal express contract into an implied contract for recovery).
  • Partial-illegality exception and “aid from illegality” test: Five Star Athlete Mgmt., Inc. v. Davis, 845 S.E.2d 754 (Ga. Ct. App. 2020) (recovery allowed only for legal portion when contract illegal only in part; but plaintiff cannot recover if its claim requires “aid” from the illegal transaction); distinction between illegal “object or purpose” versus collateral illegality: Smith v. Saulsbury, 649 S.E.2d 344 (Ga. Ct. App. 2007); example where performance need not violate law: Shannondoah, Inc. v. Smith, 230 S.E.2d 351 (Ga. Ct. App. 1976); “aid” framing: Adams v. Trust Co. Bank, 426 S.E.2d 36 (Ga. Ct. App. 1992); “depends upon/stems from” formulation: Nayani v. Hassanali, 868 S.E.2d 465 (Ga. Ct. App. 2022).
  • Certification restraint (Georgia-law clarity): Peoples Gas Sys. v. Posen Constr., Inc., 931 F.3d 1337 (11th Cir. 2019) (quoting Fla. VirtualSchool v. K12, Inc., 735 F.3d 1271 (11th Cir. 2013)).

3.2. Legal Reasoning

A. Statutory fiduciary duty cannot be disclaimed by contract

The district court treated fiduciary status as something the parties could contract around: if created by contract, it can be disclaimed by contract. The Eleventh Circuit corrected the category error. The relevant fiduciary duty was “created by law”—specifically, the Investment Advisers Act. Having already determined (at summary judgment) that Tenor provided “investment advice” within the Act, the only question was whether the Act’s fiduciary duties applied despite the agreement’s disclaimer. The panel answered yes for two interlocking reasons:

  1. Scope: The duties in § 206 attach to “any investment adviser,” registered or not (reinforced by Goldstein v. SEC).
  2. Nonwaiver: The Act contains an antiwaiver provision, 15 U.S.C. § 80b-15(a), voiding “[a]ny condition, stipulation, or provision” that waives compliance. A disclaimer of fiduciary relationship, when used to defeat the Act’s fiduciary obligations, functions as a prohibited waiver.

Importantly, the court also bridged federal fiduciary standards into Georgia’s breach-of-fiduciary-duty cause of action: Georgia recognizes duties “created by law,” and it is not limited to Georgia statutes. Because the Investment Advisers Act supplies an ascertainable standard of “utmost good faith” and disclosure consistent with O.C.G.A. § 23-2-58, the federal duty can satisfy the first element of a Georgia fiduciary-duty claim.

B. Considering Georgia registration exemptions despite late assertion

The Georgia Securities Act makes it unlawful to transact business as an investment adviser unless registered or “exempt.” The district court initially granted Tenor summary judgment on a ground no party raised (a federal-covered-adviser theory). On reconsideration, after acknowledging that rationale was wrong, it accepted Tenor’s alternative exemption: fewer than six Georgia clients in the prior twelve months (GA. COMP. R. & REGS. 590-4-4.13(1)(b); O.C.G.A. § 10-5-32(b)(3)).

On appeal, GunBroker argued waiver and discovery unfairness. The panel assumed (without deciding) that the exemption is an affirmative defense, then applied the Eleventh Circuit’s procedural doctrine: unpleaded defenses may be considered where the plaintiff had notice and no prejudice (Grant; Hassan; Miranda de Villalba). Tenor’s first meaningful chance to litigate exemptions arose only because the district court injected an exemption theory sua sponte; Tenor raised the client-count exemption in direct response, and GunBroker had the chance to rebut it in reply. That sequencing defeated prejudice.

C. No unjust enrichment for stage-two services where the “benefit” depends on illegal stage-one advice

The unjust-enrichment reversal turns on a two-layered illegality analysis—one federal and one state:

  1. Federal voidness rule: 15 U.S.C. § 80b-15(b) voids “every contract” that “involves” an Investment Advisers Act violation. The court treated the stage-one unlawful advisory/valuation services as sufficient to render the agreement void “in its totality,” even if later services were not independently unlawful.
  2. Georgia unjust-enrichment limits: Georgia generally bars quantum meruit/unjust enrichment where the contract is entirely void for public-policy reasons (Remediation Servs.; JR Constr./Elec.; Sapp), allowing recovery only when illegality is partial and the plaintiff can prove its claim without “aid” from the illegal portion (Five Star Athlete Mgmt., Inc. v. Davis; Adams; Nayani).

Factually, Tenor’s stage-two fundraising “benefit” was inseparable from stage one. Trial testimony established that Tenor pitched lenders using a financing memorandum that included Tenor’s stage-one valuation and financial analysis—precisely the unlawful investment-adviser work. And the contract’s staged structure made stage two contingent on stage-one advice: GunBroker would proceed only if it “receives the work product” and likes Tenor’s recommendations. Accordingly, Tenor’s unjust-enrichment proof necessarily incorporated the illegal services, failing Georgia’s “aid from illegality” test and independently colliding with § 80b-15(b)’s voidness rule.

3.3. Impact

  • Contract drafting limits for financial advisers: In the Eleventh Circuit, a “no fiduciary relationship” clause will not defeat fiduciary-duty exposure when the adviser’s status triggers nonwaivable federal duties under the Investment Advisers Act. Parties can allocate risk, but they cannot contract out of § 206’s fiduciary standard (reinforced by § 80b-15(a)).
  • State-law claims can be powered by federal fiduciary standards: The decision strengthens the pathway for plaintiffs in Georgia to plead breach of fiduciary duty grounded in federal adviser obligations as a “duty created by law,” rather than relying on traditional confidential-relationship fact patterns alone.
  • Restitution claims are vulnerable when services are “tethered” to illegal advisory work: Even where later services look lawful in isolation (e.g., lender outreach), unjust enrichment may fail if the benefit was produced by using illegal investment advice or if the claim’s proof necessarily relies on the illegal component. This raises the stakes for compliance at the front end of multi-stage engagements: illegality at stage one may wipe out recovery for later work.
  • Procedural lesson on exemptions/affirmative defenses: The panel’s no-prejudice approach continues to permit consideration of late-raised defenses where notice exists, while flagging potential forthcoming Supreme Court refinement via Younge v. Fulton Jud. Cir. Dist. Att'y.

4. Complex Concepts Simplified

Investment adviser fiduciary duty (Investment Advisers Act § 206)
A legal obligation imposed by federal law requiring advisers to act with utmost good faith, disclose material conflicts/facts, and exercise reasonable care to avoid misleading clients. It applies whether or not the adviser is registered.
Antiwaiver provision (15 U.S.C. § 80b-15(a))
A clause in the Act that makes void any contract term attempting to waive compliance with the Act. A disclaimer cannot be used to nullify statutory duties.
Void contract for Advisers Act violations (15 U.S.C. § 80b-15(b))
If a contract “involves” an Advisers Act violation, it can be treated as void as to the violator’s rights under it—undermining the ability to enforce fees and, as here, influencing restitution/quantum meruit outcomes.
Affirmative defense and “waiver”
An argument a defendant typically must plead early (e.g., an exemption). But federal courts may still consider it if the other side had notice and was not unfairly prejudiced.
Unjust enrichment / quantum meruit
An equitable way to recover the value of a benefit conferred when no enforceable contract governs. Georgia generally forbids it when recovery would effectively enforce an illegal bargain or when the plaintiff must rely on illegal conduct to prove the benefit.
“Severability” versus “inseparability”
A severability clause can sometimes preserve lawful provisions of a contract, but it cannot salvage restitution where (as found here) the claimed “benefit” and proof of value are built from the unlawful part of the engagement.

5. Conclusion

Tenor Capital Partners, LLC v. GunBroker.com, LLC delivers two practical rules with substantial compliance and remedies consequences: (1) when a party acts as an investment adviser, the Investment Advisers Act imposes fiduciary duties that cannot be contracted away, and those duties can supply the fiduciary-duty element for a Georgia breach-of-fiduciary-duty claim; and (2) where an advisory contract is void because it “involves” an Advisers Act violation, an adviser cannot recover in unjust enrichment for later-stage services when the alleged benefit and the proof of value depend on the illegal advisory work. The decision thus tightens the connection between federal registration/compliance failures and downstream state-law liability and restitution outcomes in multi-stage finance engagements.