Timothy O'Toole was quoted regarding recent whistleblower incentives provided by Congress and the Securities & Exchange Commission (SEC) in tandem with the Dodd-Frank Act. The rules may offer attorneys a way around state ethics rules that require them to treat attorney-client information as confidential, O'Toole said, adding that although the duty of confidentiality is the highest an attorney has, the new SEC rules may provide some leeway around state ethics rules that privilege such information. "Ethical exceptions apply to lawyers' own actions. The SEC rules do not," he said.
Some industry experts interpret SEC rules as allowing attorneys to disclose confidential information in cases of malfeasance even when their services weren't required. This interpretation may encourage corporate attorneys to take advantage of the incentives offered by the commission, O'Toole said. "There's some suggestion that SEC rules allow more disclosure." There have yet to be reported cases since the SEC rules went into effect in 2011 where corporate attorneys have won monetary rewards, however O'Toole said that the absence of cases where lawyers succeeded as whistleblowers may simply reflect that such decisions have been sealed from public view. "You might see some heavily redacted decision," he said, and predicted that it's a matter of time before examples come to light. "We'll see the cases. The law is pretty new, so it takes a while."