Sarbanes-Oxley Governed Lawyer’s ‘Noisy Withdrawal’ in Stanford Case
Posted Feb 19, 2009 9:41 AM CDT
By Debra Cassens Weiss
The Proskauer Rose lawyer who disavowed everything he had told authorities about an investment firm affiliated with billionaire Robert Allen Stanford was acting under a provision of the Sarbanes-Oxley Act.
Bloomberg News identified the lawyer as Thomas Sjoblom. His actions are termed a “noisy withdrawal” under a section of the Sarbanes-Oxley Act that clarifies the ethical responsibilities for lawyers practicing before the Securities and Exchange Commission, the American Lawyer reports.
Sjoblom disaffirmed information he had given to investigators and withdrew from representing the Antigua affiliate of Stanford’s investment advisory firm. Days later, the SEC charged Stanford in a civil complaint with selling $8 billion in certificates of deposit based on unsubstantiated claims that the CDs had been generating double-digit annual returns.
Sarbanes-Oxley makes clear that any lawyer before the SEC may reveal confidential client information to investigators if the lawyer believes it will prevent a legal violation or help rectify losses suffered by investors, Fordham law professor Bruce Green told the American Lawyer.
Stephen Gillers of New York University School of Law told the publication that Sjoblom acted properly under the SOX regulation. "He did the right thing here," Gillers said.
Additional ABAJournal.com coverage:
Updated at 3:52 p.m. to include links to other coverage and on Feb. 20 to include additional links.