Corporate lawyers face new disclosure rules
The new Sarbanes-Oxley Act for corporate reform will force company lawyers to report any evidence of misconduct to senior executives and, if necessary, the company board.
According to reports, US Securities & Exchange Commission chief Harvey Pitt spelled out the new measures to regulate corporate lawyers in an address to the American Bar Association.
Despite objections from lawyers over client confidentiality, Pitt said corporate lawyers were accountable to shareholders of public companies, not company executives, in the same manner expected of accountants.
He said the measures were included in the Act because its authors were sceptical about the ability of lawyers to police themselves, and said it was the responsibility of the SEC to set the standards.