Legal News

Sizing up Thomas Sjoblom?s ?Noisy Withdrawal?

By Ashby Jones

The WSJ and others have reported that Proskauer Rose’s Thomas Sjoblom resigned from representing Allen Stanford and his companies on Feb. 14, three days before the SEC filed suit against Stanford and others, alleging an $8 billion fraud. (Click here for the WSJ story; here for the Bloomberg story.)

According to the Journal and others, Sjoblom, a Proskauer litigator and former Law Blog Lawyer of the Day sent a note to the SEC in which he said, “I disaffirm all prior oral and written representations made by me and my associates to the SEC staff regarding Stanford Financial Group and its affiliates.”

Did Sjoblom do the right thing in withdrawing his representation? Sjoblom did not respond to a call from the Law Blog. But according to this nice piece by AmLaw’s Zach Lowe, it sounds like Sjoblom had the law on his side.

According to Lowe, the issue of when lawyers need to withdraw from representation of a client is governed by two separate regimes: state rules regarding lawyer ethics, as well as the federal Sarbanes-Oxley law. Lowe reports that SOX actually makes life easier for lawyers in such predicaments, because it explicitly allows them to reveal confidential client information to investigators if that attorney believes that doing so will prevent a violation of the law or help rectify losses investors have already suffered. There’s even a colorful name for what Sjoblom is alleged to have done: the “noisy withdrawal.”

Said NYU law professor and ethics expert Stephen Gillers: “He did the right thing here.”

Full post as published by Law Blog - WSJ.com on February 19, 2009 (boomark / email).