Attorneys cautioned on Sarbanes-Oxley disclosure
In implementing the Sarbanes-Oxley
Act of 2002, the Securities and Exchange Commission recently approved a rule
permitting attorneys practicing before the SEC to disclose certain confidential
information to the SEC without their client's consent.
In July, the SEC's general counsel
released a letter stating that state bar associations were pre-empted from disciplining
an attorney who made voluntary disclosure of client confidences to the SEC in
reliance on its rules.
In California, however, the ethical
obligation of an attorney to maintain client confidences "at every peril to
himself or herself" is required by statute, §6068(e) of the Business & Professions
Code.
In response to the new rule, the Corporations Committee of the State Bar's
Business Law Section sent a letter to the SEC notifying it that the new rule
(17 CFR 205.3(d)(2)), conflicts with California law. The committee also notified
the SEC that in the absence of an appellate judgment in favor of the SEC's pre-emption
claim, the California State Bar may not refuse to enforce §6068(e).
Full text of the letter
to the SEC is at http://dwalliance.com/sbar/SEC.PDF.
The committee has asked the State
Bar's committee on professional responsibility to assist in preparing an educational
ethics alert on the issue. The alert is expected to be completed before the
end of the year.
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