Risk Update

Confidentiality, Conflicts & Risk — Government Inquiries and Conflicts Considerations, Credit Suisse Surprise

Interesting analysis and commentary, as always, from Dentons partners Shari L. Klevens and Alanna Clair: “Risks in Responding to Government Inquiries on Behalf of Clients” —

  • “But there can be risks for outside counsel when a governmental agency—particularly those with law enforcement power—makes an informal inquiry regarding a client. In some instances, a government representative could, with or without warning, contact outside counsel to ask questions about the client’s activities, including the client’s business, relationships or financials.”
  • “In such cases, the corporate attorney may be called upon to navigate the inherent tension between being forthright with the inquiring government officials (perhaps in an attempt to clear up any perceived misunderstanding and resolve the inquiry swiftly and favorably), with the requirement to abide by counsel’s ethical obligations to guard client confidences, particularly where revealing information could cause the client to face criminal liability or a formal government investigation.”
  • “At the moment of first contact with a government agent, the first issue for counsel to determine is what role the attorney will play. Is the attorney simply a “third-party witness” with access to information and documents related to a former client matter? Or does the client want the attorney to represent the client in the investigation?”
  • “The answer has the potential to create a conflict between the client and attorney and should be considered carefully. If the attorney is representing the client in connection with work previously performed by the attorney and which could cause the government to focus on the attorney, then representing the client could implicate conflict of interest issues.”
  • “Thus, when facing a government inquiry, the lawyer must evaluate whether he or she can take on the new representation and whether the inquiry itself creates a conflict between the lawyer and the client. It may be prudent for the lawyer to decline representation and to advise the client to obtain separate counsel in the inquiry or investigation going forward so the lawyer can respond separately as a witness.”
  • “If the lawyer takes on the matter, he or she should continually evaluate conflict issues as the inquiry progresses to insure that the lawyer is taking the appropriate steps to abide by its ethical obligations and ensure that all confidentiality obligations are met.”

Allen & Overy ‘blacklisted’ by Credit Suisse after associate left briefcase on train” —

  • “Allen & Overy has been blacklisted by Credit Suisse’s General Counsel after an A&O associate left a briefcase containing sensitive client documents on a train in Finland. The Allen & Overy banking associate was travelling home for the weekend when he forgot the briefcase, which contained ‘highly confidential Credit Suisse documents’ according to sources.”
  • “The briefcase was recovered before any of its contents went astray, but, along with other perceived mistakes by A&O, the incident has been used by Credit Suisse General Counsel Romeo Cerutti as a pretext to freeze out the firm. ‘Cerutti has taken care of this matter personally’ said a source.”
  • “Credit Suisse reappointed Allen & Overy to its panel at the start of 2021 and it is a significant client of the firm, with billings understood to be in the region of £25 million a year.”
  • “However, the relationship with Cerutti is understood to have soured when Allen & Overy decided to advise Grant Thornton on the administration of failed finance company Greensill Capital. The work brought the firm £3.9 million in fees.”
  • “Cerutti and his team are understood to have been unhappy that A&O worked on both sides of the Greensill matter, and began identifying perceived issues with the firm’s work, including alleged data leaks across the Chinese Wall between A&O’s Credit Suisse and Greensill teams, and the Finnish Train Incident.”