Lawyer Predicts ‘Miranda Warnings’ by Law Firms in Corporate Probes
A judge’s recent decision to refer Irell & Manella to the California State Bar for an ethics probe has corporate lawyers speculating it will lead to more detailed warnings by law firms conducting corporate probes.
U.S. District Judge Cormac Carney said Irell had conflicts of interest when it represented both Broadcom Corp. and its chief financial officer, William Ruehle. The judge also said the law firm should have obtained Ruehle’s written consent before turning over information to prosecutors from an interview with him.
Irell contends it gave Ruehle proper notice, and the judge’s ruling is in error. Still, the decision “is reverberating among law firms” that conduct internal corporate investigations, the Wall Street Journal reports (sub. req.). While law firms already warn corporate employees that they represent their employer rather than workers, the notice is likely to become more precise, the story says.
Steve Crimmins, a former Securities and Exchange Commission lawyer now at Mayer Brown, told the newspaper that the warnings will “turn into something akin to the Miranda warning the police give to suspects.”
A similar issue is being raised in a suit by an executive of Stanford Financial Group, the article points out. Laura Pendergest-Holt claims in the malpractice suit against Thomas Sjoblom and his law firm Proskauer Rose that the partner represented the company rather than her interests in hearings before the SEC. She also claims Sjoblom failed to inform her of her Fifth Amendment rights.
Pendergest-Holt has been charged with obstructing an SEC investigation into her employer by withholding information.
