Attorney-Client Privilege Upheld In District Court

In a powerful affirmation of attorney-client privilege, a federal district court in Georgia has dismissed a legal malpractice claim against a law firm. The plaintiff, which was the receiver for a financial services firm, argued that the law firm should have notified the SEC of deficiencies in the financial firm’s accounting, and that had it done so ensuing damages would have been mitigated. But the court said there was no obligation to “report out.” “Defendants were hired to provide legal advice which they did,” the court said: “Securities lawyers are not informants for the SEC.”