photo: The Cornballer via Flickr
Do you remember a while back that Bank of America bought financial services firm Merrill Lynch? Remember BofA made statements to the stockholders in order to get the stockholders to approve the takeover? Remember that the Securities and Exchange Commission caught them red-handed having made false statements to stockholders?
Remember, too, that BofA claimed that it should not be held liable for these misstatements as it relied upon advice of counsel — in other words, “the lawyer made us do it”? Yeah, you remember all that, right?
But then BofA refused to tell the SEC or federal Judge Jed Rakoff exactly what that advice was or exactly who gave them that advice, claiming attorney-client privilege.
And I flipped my lid ranting and raving about the Doctrine of Implied Waiver.
You cannot use attorney-client privilege as both a shield and a sword. Once you assert reliance on counsel, which is an AFFIRMATIVE defense (that means a defense on which the defendant bears the burden of proof), you lose attorney-client privilege as to those matters on which you claim to be relying.
Then I went nuts again when BofA tried to pull this same “attorney-client privilege means we can say our lawyer made us do it, but we don’t have to put up or shut up” nonsense in response to a request for information from the House Oversight Committee’s chair Rep. Edolphus Towns.
Well, BofA sought second opinions from other law firms, and guess what? Their law firms agree with me. Once legal advice has been brought into issue, the client has impliedly waived the attorney-client privilege.
The New York Times now reports that BofA has finally decided to give up its ridiculous insistence that it still has any attorney-client privilege in regards to the decision-making process behind their false statements.
In a stunning reversal, Bank of America’s board has voted to reveal the legal advice that the bank received late last year about its merger with Merrill Lynch, according to three people briefed on the matter.
-snip-
Lawyers from Cleary Gottlieb Steen & Hamilton as well as Paul, Weiss, Rifkind, Wharton & Garrison advised the bank to waive its right to legal secrecy, which is known as attorney-client privilege.
I know BofA is trying to save face by saying they are going to waive attorney-client privilege, but they know — and we know — that they waived the privilege back when they claimed reliance on advice of counsel to the SEC.
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Nicely done, Counselor.
But use of the phrase “stunning reversal” by the NY Times reporter to describe this development tells me that she is not a reader around here.
Otherwise the lede on the story would have been “In a move widely anticipated by lawyers and those who have been following the story, . . .”
Thank you, lawyer. Good to see the Bank come around to the non-Bush era view of counsel.
By the way, Bank of America called the Obama Administration outlaw today.
Well put, Peterr.
Amazing the outrageous arguments corporatists think they can get away with. Good to hear two of the country’s most prominent law firms had the sense to tell them the truth.
The lag time probably was occupied by BofA execs screaming at Paul Weiss and Clearhy Gottlieb partners something like, “But you’re a lawyer! It’s your job to figure out how we CAN do what we wanna do!”
Hehehehe… ;-))
The reason they use them is because so far they have usually worked. It wasn’t the SEC who tripped them up over this. It was the judge. The SEC was willing to cut a deal letting BoA off with a relatively small fine.
Well, words like fraud, and misleading representations, are so hard to comprehend, and who knows how many billions it takes to be material. So naturally, the problem is the lawyers.
In fact, I do remember that very clearly, because “good faith reliance on advice of counsel” has become the 21st Century version of the Nuremberg defense. But now it’s not only being used to beat war-crimes raps, but also civil liability. Good God!
woohoo — nicely done
Wonder how much BofA paid Cleary Gottlieb and Paul Weiss for this ultra sophisticated legal advice? Whatever it is, the officers ought to refund it out of their own pockets. Freaking chumps.
You got a case girl but will any one take it is the question? Spocko on his diary needs your help if its your area of law please help. Consider it a favor I always try and honor my debts but I understand if its not your kind of law.
Well, there are a bunch of Wall Street Law Firm partners who have the tightest assholes on Earth, because their illegal advice is going to come right out of their off-shore accounts. And their names are going to be splashed all over court documents from here to the Supreme Court, because Cleary and Paul Weiss are gleefully ready to put their competitors out of business! Oh, those wonderful “professionals” we call attorneys…
If “reliance on counsel” was good enough for the president, VP, and a slew of other miscreants, then by God it’s good enough for the charlatans^Wcaptains of industry!
What diary of Spocko’s? What are we talking about?
I know this is totally off point but your use of “flipped my lid” is pretty hilarious.
por quoi?
Good work, counselor! It’s really nice to see someone who remembers all this stuff from law school and calls these prevaricating legal whores out on their misapplication of legal principals. It is such a relief to see someone who is working to better our collective reputation rather than continue to have it dragged through the gutter.
If these ‘attorneys’ actually gave that advice to their client, BofA, I can think of at least 2 canons of ethics that were violated: the one about failing to do adequate research that misleads your client and the one about arguing a frivolous position to a judicial or quasi-jusdicial body.
I really wish that disciplinary committees would take their responsibilities more seriously and start sanctioning or disbarring some of these money-grubbing cretins.
Again, Good Job, Counselor!
I don’t know; maybe it’s the context. Something about it really amused me.
Cynthia, thanks very much.
This “legal advice” that BoA got has the same odor to it that Bush’s torture memos had. It was some lawyer’s warped and distorted pretzeling of law in order to come up with a justification for doing what the boss wanted.