Lawyers blowing the whistle on issuer clients might be “rewarded” with state bar investigations for possible breaches of their duty of confidentiality.

Introduction -

Every issuer of securities is a repository of confidential information, and virtually every lawyer who works for an issuer has access to that repository. In addition, nearly every US issuer has a problem from time to time that could rise to the level of a violation of the federal securities laws. Now that the US Securities and Exchange Commission provides monetary awards to successful whistleblowers, issuers might wonder whether their lawyers will be tempted to disclose confidential information to the SEC in pursuit of an award.