CORPORATE-FRAUD LAW FORCES LAWYERS TO BE WHISTLE-BLOWERS
by Stephanie Francis Cahill in the ABA Journal Report:

"The corporate responsibility law President Bush signed Tuesday requires in-house and outside lawyers to report evidence of corporate wrongdoing to their client companies' boards of directors. "

Experts believe the new statute will have a chilling effect on client communications.

The law is the Sarbanes-Oxley Act of 2002. It "requires attorneys to report evidence of a material violation of securities law or breach of fiduciary duty to the company’s general counsel or chief executive officer.

If the general counsel or CEO does not appropriately respond to the evidence, the lawyer must report the incident to the company’s board of directors or audit board.

The rule will be administered by the Securities and Exchange Commission, and the law mandates that the agency establish new professional standards for lawyers. "

The bill passed in the House on July 26, with a 423-3 vote. A few hours later, the Senate approved it 99-0.