Attorney Liability for Client Fraud

Tuesday, January 1st, 1991 at 12:00 am by Marc I. Steinberg
Marc I. Steinberg, Attorney Liability for Client Fraud, 1991 Colum. Bus. L. Rev. 1

In today’s legal environment, the role of corporate/securities counsel is complex. Counsel has been referred to as possessing the “passkey” to the securities markets. For example, in the opinion letter context, the lawyer’s rendering of such an opinion “is frequently the red or green light to the consummation of a securities transaction.” And, as stated by the eminent Judge Friendly, “In our complex society the accountant’s certificate and the lawyer’s opinion can be instruments for inflicting pecuniary loss more potent than the chisel or the crowbar.” This article focuses on counsel’s liability exposure when his or her client engages in fraudulent conduct. The article begins by addressing the pertinent ethical rules promulgated by the American Bar Association (ABA). Thereafter, the discussion provides an analysis of the pertinent case law followed by treatment of SEC Rule 2(e). The article concludes with observations dealing with certain problematic situations.

Author Information

Rupert and Lillian Radford Professor of Law, School of Law, Southern Methodist University. Of counsel, Winstead Sechrest & Minick. This article will appear as a chapter in Professor Steinberg's forthcoming book on Corporate/Securities Malpractice to be published by the Practising Law Institute.