Monday, December 21, 2009

Lawyer Blogging and Social Networking – Are the Rewards Worth the Risk?

A recent story made the rounds regarding the appropriateness of judges “friending” lawyers on facebook and other social networks. A judge in Florida ruled that the practice “could create the impression that lawyers are in a special position to influence their judge friends.” There have also been more extreme examples of lawyer missteps.

Another story that was highlighted in a Law Firm Risk Roundtable bulletin some while back highlighted the significant risks of unfettered lawyer blogging. In this case, an associate at an AmLaw 100 firm publicly boasted on their blog about their intent to ignore an ethical screen. Here’s an excerpt of that post which created clear danger for that firm were it ever expecting a disqualification motion:
  • “An associate just walked by my office… and she asked how it felt to have an ethical wall being built around me… I had no idea what the hell she was talking about. So she says she's referring to the firm-wide email… I responded that I guess I hadn't read it because I always immediately delete all my junk mail, and she pointed out that just because something is sent to the ‘all-attorney’ email list doesn't mean its junk mail… Whatever. DELETE!”
Lawyer blogging and social networking can provide significant exposure and business development benefit for your firm. But it’s also a risk issue that should be identified, evaluated and addressed. Does your firm have policies and guidelines on lawyer blogging and social networking? In several instances, legal insurance providers are including policy requirements in their audit guidelines and checklists. Here are some resources firms should review when developing their own policies.
These links have been added to the Law Firm Risk Resources wiki page. If you have additional links to share, please feel free to contribute to the library.

Thursday, December 10, 2009

Another Lawyer Charged with Insider Trading

Hot on the heels of news of stepped up SEC enforcement efforts, another lawyer has been charged with insider trading in connection with the unfolding Galleon Probe. As reported by the Wall Stree Journal, a firm already in the news for attorney insider misconduct again finds itself in the news.

This particular attorney left the firm in September 2008. But his legacy lives on. A guilty plea is expected. And it's unclear if this individual is connected with the other associate charged last month.

Thursday, December 3, 2009

SEC Stepping Up Insider Trading War with New Subpoenas

As reported by the Wall Street Journal today, the SEC is making noise about efforts to step up enforcement and clamp down on insider trading. These efforts have started with at least three dozen subpoenas sent to brokerages and hedge funds.

Attention on this issue is definitely swelling. And this attention is not limited to pure financial institutions. (Readers should recall the law firm insider trading scandal that ended tragically this past October.) The article calls out the SEC's focus on understanding how confidential and market sensitive information moves (appropriately or inappropriately) among all parties, including law firms:
  • "[The SEC] says it is now trying to better understand the flows of information on Wall Street — where traders, bankers, lawyers and others behind-the-scenes players swap information and favors. The SEC is using computer technology to examine these webs of relationships, especially when individuals or firms surface in multiple surveillance referrals."

Wednesday, December 2, 2009

Judge Barring FTC Red Flag Rules for Law Firms Issues Written Opinion

As reported by law.com, the judge who issued a ruling on October 30th which prevented Red Flag Rules from being applied to law firms just issued his written opinion. It's available online here in PDF form.

The opinion details the judgment that the FTC overstepped its bounds in classifying firms as "creditors" and thus subject to Red Flag prescriptions. It argues that Congress did not intend for these rules to apply to law firms and the rules were being misapplied by the FTC.