Over objections from much of the legal profession, the SEC is preparing to approve a new rule this spring requiring attorneys like Emerson to blow the whistle when confronted with wrongdoing, sources close to the commission say.
The two-part rule, likely to be adopted as soon as March or April, would put the burden on corporate directors to disclose to the SEC when a lawyer withdraws because of illicit activity. If the board fails to act, the lawyer would be required to step away from the client and report the wrongdoing—a measure known as a "noisy withdrawal."
—Greg Burns, "Rule is readied on duties of lawyer," Chicago Tribune, February 1, 2004
SEC regulations have now introduced a couple of new phrases into the US legal lexicon such as "up-the-ladder" reporting — where lawyers are required to bypass general counsel if there is no appropriate response to concerns and report directly to the audit committee or the board — and "noisy withdrawal" — where lawyers are required if necessary to resign with notice to the SEC where there has been a serious breach of securities law.
—Jon Robins, "Let me in, I'm a lawyer," The Independent (London, England), May 10, 2004
