“This is a test case, with industrywide implications, where what is at issue is the performance of attorneys in interpreting securities laws.”
That’s what Congressman Dennis Kucinich said Friday, the same day the SEC told a congressional panel it had widened its investigation to include “all aspects” of Bank of America’s merger with Merrill.
Sue Reisinger of Corporate Counsel has the full story here.
The BofA deal has placed a spotlight on the bank’s outside counsel, Wachtell, Lipton — especially considering the waiver of attorney-client privilege relating to the deal documents and advice.
Months into the investigation, no true “smoking gun” document has been discovered, and Wachtell, by all accounts a firm full of top-notch lawyers, has appeared to have acted directly for the benefit of its client. Which is, of course, the way things usually work.
But it remains difficult to see how the attorney-client privilege waiver, in combination with the extensive probe, will not have somewhat of a chilling effect on advice given to clients in similar fast-paced, multi-faceted situations.
Lawyers have probably always had way more input and decision-making responsibilities than shareholders were aware of, but the final call belongs to the client.
As these congressional and SEC investigations play out, it could be game-changing if the lawyers are ultimately held responsible. Especially if “responsibility” is a result of advice no lawyers of the same stripes and abilities see worthy of criticism.
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