Government action against a Wall Street firm exposed elite lawyers to fraud liability
Evidence
Clients, however, can sue lawyers for malpractice; and this does happen at times. Moreover, in 1992, an event occurred that shook the Wall Street bar to its foundations. A government agency, the Office of Thrift Supervision (OTS), brought an administra tive action against Kaye, Scholer—a major Wall Street firm. The firm had represented a failed savings-and-loan association, and the OTS claimed that what the firm did on behalf of its client crossed the line between honest advocacy, into the realm of fraud or malpractice. Faced with possible disaster, the firm settled with OTS for $41 million. Whatever the facts of the case, it was a signal to the upper bar that its ethical practices were not beyond question or dispute. — Lawrence M. Friedman and Grant M. Hayden, American Law, 1292
Categorization
- XREF: connects to: Deferred prosecution lets serious corporate wrongdoers buy their way out of liability