Duty of Confidentiality

Question 1

Attorney-Client Privilege

Answer 1

The attorney cannot be compelled to disclose confidential communications with the client. This privilege extends to those persons necessary to the attorney’s representation of the client; and the privilege never terminates.

Exceptions include: (1) where the client seeks to employ the attorney to assist the commission of a crime or fraud; (2) issues relevant to a malpractice suit or suit for fees; and (3) in civil litigation between two former joint-clients of the attorney

Question 2

Duty of Confidentiality

Answer 2

The attorney has a duty to the client to keep their confidences and secrets, regardless of whether the client deems it confidential, how it was acquired, or whether revealing it might embarrass the client.

Question 3

Duty of Confidentiality Exceptions

Answer 3

ABA Exceptions: (1) consent or implied authority; (2) to prevent future death or serious bodily harm; (3) to prevent or rectify substantial financial loss; (4) required by final court orders; (5) necessary to collect a fee or protect the lawyer from a criminal charge or civil litigation.

CA Exceptions: A lawyer is permitted to reveal confidential information when necessary to prevent a criminal act that will cause death or substantial bodily harm.

Question 4

Duty Under Sarbanes-Oxley

Answer 4

If a securities lawyer becomes aware of credible evidence that her client is materially violating federal or state securities law, she must report the evidence to the client’s CLO.

The CLO must investigate and report the results to the lawyer. If the lawyer believes the CLO did not achieve the appropriate results, the lawyer must report the evidence to the client’s board, the audit committee of the board, or a committee made up of outside directors.

The lawyer may reveal the information that is reasonably necessary to:

(1) stop the client from committing a violation that will cause substantial financial injury to the client or its investors;
(2) rectify such a financial injury if the lawyer’s services were used to further the violation; or
(3) to prevent the client from committing perjury in an SEC matter.

In CA, the rules do not permit such disclosure. Thus, there may be a conflict.