I would modify, on the law and the facts, to reinstate the causes of action for breach of fiduciary duty and fraud to the extent that they are based on defendant’s failure to disclose its compensation arrangements with its customers.
Although the majority concludes that there can be no fiduciary relationship between parties dealing at arm’s length, the Court of Appeals acknowledged in EBC I, Inc. v Goldman, Sachs & Co. (5 NY3d 11 [2005]) that even though an issuer and underwriter have an arm’s length commercial relationship, there may also be an advisory relationship independent of the underwriting agreement that creates a fiduciary duty.
While the majority states that it has examined the scope of the underwriting agreement to determine whether the parties had a fiduciary relationship that transcended the agreement, the majority’s analysis essentially hinges solely on the language of the agreement, which concededly does not set forth a fiduciary relationship. This analysis runs afoul of the Court of Appeals’ recognition that an advisory relationship independent of the underwriting agreement would be demonstrated upon proof that “eToys was induced to and did repose confidence in Goldman Sachs’ knowledge and expertise to advise it as to a fair IPO price and engage in honest dealings with eToys’ best interest in mind” (5 NY3d at 20). Because the record presents proof on this very subject, the majority improperly engages in issue determining rather than issue finding when it concludes as a matter of law that there was no fiduciary relationship (see generally Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]; Martin v Citibank, N.A., 64 AD3d 477, 478 [2009]).
*222Defendant’s witness Lawton Fitt, the eToys “deal captain,” testified that she advised plaintiff about the pricing of the initial public offering (IPO). In particular, Fitt testified:
“[F]rom an advisory standpoint, the role that I was in was as adjunct, if you will, to the investment banking role. I was one of the advisors to the company, and that is an unusual, unique position, if you think in terms of the equity function, where the equity function is largely dealing with the investor community, not so much the investment banking community or the corporate community.”
This buttresses the testimony of plaintiffs chairman and chief executive officer, Edward Lenk, that Goldman Sachs gave eToys advice on the pricing of the IPO, upon which plaintiff relied. Thus, Lenk’s testimony about his reliance on defendant’s advice is not merely an expression of confidence in defendant’s expertise, as found by the majority, but confirmation of Fitt’s testimony that she was the expert on pricing and was the force behind the ultimate decision to price the shares at $20.
That plaintiff and defendant negotiated the price does not negate plaintiffs proof that defendant was advising plaintiff and that plaintiff was relying on defendant’s expertise in pricing. The majority’s suggestion that plaintiff is seeking to unilaterally impose a fiduciary duty is belied by evidence in this record that defendant was acting as an advisor on the IPO share price, that defendant induced plaintiff to rely on this advice, and that plaintiff did so rely, thus creating a relationship of higher trust independent from the underwriting agreement (see EBC I, 5 NY3d at 20; Pergament v Roach, 41 AD3d 569, 571 [2007]; Xpedior Creditor Trust v Credit Suisse First Boston (USA) Inc., 399 F Supp 2d 375, 385 [SD NY 2005]; compare HF Mgt. Servs. LLC v Pistone, 34 AD3d 82, 85 [2006] [no evidence that the underwriter acted as an “ ‘expert advisor on market conditions’ ”]).* The majority’s conclusion that there can be no fiduciary duty because the parties have adverse interests echoes the observations of the dissent in EBC I where Judge Read wrote:
*223“How may a buyer ever owe a duty of the highest trust and confidence to a seller regarding a negotiated purchase price? The interests of a buyer and seller are inevitably not the same. Indeed, it is a longstanding principle of contract law that a buyer may make a binding contract to buy something that it knows its seller undervalues” (5 NY3d at 26).
However, Judge Read’s concern about recognizing the viability of a fiduciary relationship was implicitly rejected by the majority when it held that there can be a limited fiduciary duty separate and apart from the underwriting agreement.
The majority’s citation to Eastbrook Caribe, A.V.V. v Fresh Del Monte Produce, Inc. (11 AD3d 296 [2004], lv dismissed and denied 4 NY3d 844 [2005]) is inapt, as it merely stands for the straightforward proposition that once parties become adversaries in litigation, any fiduciary relationship between them ceases. Nor does this Court’s holding in HF Mgt. Servs. LLC v Pistone (34 AD3d 82 [2006]) support dismissal of the complaint here, as suggested by the majority. To the contrary, in HF Mgt., we contrasted the situation in that case to that in EBC I, noting that there was “no indication or suggestion that. . . [the underwriter of the IPO] acted as an ‘expert advisor on market conditions’ ... in the same way that Goldman Sachs apparently advised eToys” (34 AD3d at 85).
The record evidence is also sufficient to raise a triable issue of fact as to whether the underwriter, by failing to disclose its alleged conflicts of interest with respect to the IPO pricing, breached any fiduciary duty. Again, the majority is improperly engaging in issue determining when it concludes that even assuming there was a fiduciary relationship, Goldman Sachs has established there was no breach. Lenk testified before the Securities and Exchange Commission (SEC) in 2002, prior to commencement of this action, that he thought Goldman Sachs did a great job on the IPO and that he would have been opposed to any suggestion by defendant that the IPO be priced higher. Years later, however, based upon additional information that was not known to him at the time of his SEC testimony, he testified in this lawsuit as follows:
“I believe that if we had full information as to the *224demand, the book, the conditions, what was possible, that we — our stock was going to go up that much, we would have very likely priced our IPO higher, and we would have had more proceeds, and it would have helped give us a stronger balance sheet, giving us a significant chance of surviving as a company.”
The majority cites Lenk’s testimony before the SEC and completely disregards his testimony in this action as immaterial.
The majority also improperly ignores and disregards, as irrelevant, pertinent testimony by plaintiffs expert, including the following:
“In addition to a contractual relationship concerning the underwriting (i.e. purchase) and re-sale of the issuer’s (here eToys) stock, it is also a professional relationship between the issuer, as advisee and the lead-manager, as advisor.1
“Issuers (like eToys) must necessarily rely on lead-managers (like Goldman) for advice all the way through the IPO process but particularly, and most importantly, with regard to the ultimate price per share of the IPO. Issuers simply do not have the requisite experience and expertise to make the pricing decision on their own. Recommending a specific offering price is the single most important aspect of a lead-manager’s job.”
In sum, this record presents triable issues of fact as to whether there was a fiduciary relationship between the parties, and, if so, whether defendant breached that duty — issues that should be resolved by the trier of fact.
Finally, although plaintiff has not raised any issue of fact regarding its contention that defendant misrepresented that it intended to issue the IPO shares to only long-term investors, there is evidence that plaintiff relied on defendant’s advice about the pricing of the IPO without defendant having disclosed its compensation arrangements with its customers — such as its *225alleged strategy to use the “trade up value” of underpriced IPOs to receive, as quid pro quos, increased brokerage commissions and other business from recipients of IPO allocations. Accordingly, that portion of the fraud cause of action should be reinstated and resolved by the trier of fact.
Andrias, J.E, Friedman and Renwick, JJ., concur with De-Grasse, J.; Abdus-Salaam, J., dissents in a separate opinion.
Order, Supreme Court, New York County, entered November 8, 2010, affirmed, with costs.
The motion court’s observation that it was plaintiffs decision to rely on defendant’s expertise rather than to utilize its own resources, misses the mark. The Court of Appeals recognized in EBC I that the underwriter’s role as advisor creates and also limits the underwriter’s fiduciary duty. That plaintiff could have also utilized other resources to help set the IPO price is not dispositive. As the motion court properly noted in another lawsuit, with application here, where “the parties are in a fiduciary relationship, whether [plaintiff] could reasonably rely on [defendant’s] misrepresentations generally *223raises an issue of fact precluding summary disposition (Arts Multi-Strategy Offshore Fund, Ltd. v Devaney, 26 Misc 3d 1221[A], 2009 NY Slip Op 52738[U], *7 [2009, Bransten, J.]).
''Of note, this relationship must co-exist [sic] with the ongoing relationships the lead-manager has with potential purchasers of the eToys IPO” (emphasis in original).