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Thread: SOX (not socks)
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Old 01-12-2020, 08:08 PM   #9
Hank Chinaski
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Originally Posted by LessinSF View Post
As an insurance lawyer, I read the quoted act to mean that a laywer has to report "evidence of a material
violation of securities law or breach of fiduciary duty" to the client or the issuer, with no distinction as to whether that evidence was material or not.

Preliminarily, I am not sure that this will stand judicial scrutiny. Does an attorney have to report every crackpot theory she may hear? That said, I understand that the question relates to the atty's insurance, and:

1) It should be insurable, being that negligent (as opposed to intentional) failures to report such "evidence" appears to be a violation;

(2) As such, a standard E&O polcy (not D&O, unless the attorney is an officer or director, as opposed to outside counsel) should cover it;

(3) Will carriers create exclusions, and then offer an amendatory rider granting limited coverage back?

(4) yes, if they are smart, given the exposure arising out of, um, shall we say, marginally ethical attorneys involved in the corporate scandals of the last 10 years; but

(5) insurance company's aren't generally pre-emptively smart in that way. They will have to get burned first.

i took insurance law but havenít really worked in it- jobs?
I will not suffer a fool- but I do seem to read a lot of their posts
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