International lawyers take their fight for Sarbanes-Oxley exemption to Washington

WHISTLEBLOWING: noisy withdrawals from acting 'breach confidentiality and privilege'

Lawyers from around the world will this week make a last-ditch effort to prevent the US Securities and Exchange Commission (SEC) from extending its regulation of them across international borders at a high-powered meeting in Washington DC.

The SEC's 'roundtable on attorney conduct' comes in the wake of its plans to extend whistleblowing rules to non-US lawyers under the post-Enron Sarbanes-Oxley Act (see [2002] Gazette, 14 November, 1).

If expressing their concerns internally about corporate wrongdoing does not suffice, lawyers will be obliged to effect a 'noisy withdrawal' from acting.

The proposed rules expressly cover foreign lawyers who 'appear and practise' before the SEC.

The roundtable comes at the end of the SEC's consultation on the draft rules and will be attended by the Law Society, International Bar Association, Council of Bars and Law Societies of Europe (CCBE), Japan Federation of Bar Associations, Law Society of Upper Canada (which covers Toronto) and three individual practitioners: Tom Joyce, co-head of Freshfields Bruckhaus Deringer's securities practice, Sony's general counsel Nicole Seligman, and Mexican lawyer Antonio Franck.

The Law Society has been working on its response in consultation with eight top City law firms and several in-house legal departments, as well as talking to other bar associations.

The Society has also lobbied the government and European Commission.

In its response, the Society is set to say that noisy withdrawals would breach client confidentiality and privilege, and that the rules' extra-territorial reach - which could see them cover foreign lawyers preparing material outside the US - is 'excessive'.

However, the Society, accepts that the SEC should have jurisdiction over those English solicitors who are either practising in the US or are dual-qualified and 'appear and practise' before the SEC in 'the true (and traditional) sense' of the phrase.

Both the IBA - which will be represented at the roundtable by Freshfields partner Stephen Revell - and the CCBE have called on the SEC to exempt non-US lawyers totally.

The CCBE's response said: 'Extra-territoriality of professional regulation of foreign lawyers (which is a new concept) fails to take account of the sovereignty of nations and legal systems, undermines local regulation by bars, and creates - in this case unnecessary - conflict in applicable professional rules for lawyers, in particular in relation to the issue of noisy withdrawal.'

Neil Rose