President Zack Statement Re: The Attorney Exclusion in the SEC’s Final Whistleblower Rule
The American Bar Association commends the Securities and Exchange Commission for recognizing in its final whistleblower rules the vital importance of the attorney-client privilege and the lawyer’s duty to maintain client confidentiality. Lawyers should not be rewarded for divulging privileged or confidential information their clients provide when receiving legal advice; the commission’s final rules reflect this important principle.
The attorney-client privilege enables both individual and corporate clients to communicate freely with their lawyers and encourages a full and frank discussion of complex, and often difficult, legal issues. The expectation of confidentiality encourages clients to seek out and obtain informed guidance regarding compliance with the law, which benefits not just the clients, but also the investing public and society-at-large. Incentivizing lawyers to use confidential client information for the lawyer’s own personal benefit would undermine the lawyer-client relationship and the effectiveness of the privilege, deny the client’s right to effective counsel, and reduce—not increase—compliance with the law.
The SEC’s final rule is welcome recognition of the critical importance of the attorney-client privilege and client confidentiality, both as fundamental principles of our legal system and as the most effective means of promoting corporate compliance with the federal securities laws.