Document Type

Article

Publication Date

2003

Publication Citation

67 Bench & Bar 5 (May 2003)

Abstract

The high profile meltdowns of Enron, WorldCom, Tyco, Adelphia, Global Crossing and other well-known companies have focused attention on the responsibilities of corporate gatekeepers, including attorneys, to deter or expose fraudulent conduct by their clients and associated persons. Attorneys have been the subject of investigation and criticism by Congress' and federal regulators for failing to adequately respond to their clients' fraudulent (and, possibly, criminal) conduct. The lawyer who learns that his or her client or persons acting on its behalf are engaged in a course of fraudulent or criminal conduct which threatens economic losses to non-client third parties faces both an ethical and a moral dilemma. On the one hand, the lawyer owes a professional duty to his or her client to protect the confidentiality of information communicated to the lawyer during the representation. At the same time, what responsibility does the lawyer have to investors and others who may suffer significant financial losses as a result of the client's undisclosed fraud?

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