Leadership Turn

Over the last several decades we’ve been treated to an extensive collection of corporate scandals and various cases of fraud, some of the perpetrators walked, but recently more and more of them are ending up doing time and being stripped of much of their wealth.

With each incident, I find myself asking the same question—what about the lawyers?

Not just why didn’t they act to prevent whatever was done, but why do they seem to have no accountability in the aftermath?

But I’m wondering if that’s changing.

Refco Inc.’s former lawyer Joseph Collins was indicted by a federal jury for allegedly helping the futures brokerage hide bad debts from investors, in an unusual prosecution of an outside counsel in a corporate fraud case.

Collins, a partner in Mayer Brown LLP’s Chicago office, allegedly drafted documents for transactions that hid loans and public filings Refco used in attracting $2.4 billion from banks and investors before the company went bankrupt in 2005, according to a federal indictment unsealed in New York today.

Prosecutors took the rare step of targeting an outside lawyer because Collins played such a “vital” part in the scheme, U.S. Attorney Michael Garcia told journalists today…

“Collins was in a perfect position to protect investors from being harmed, but chose instead to perpetuate the deception by actively assisting Refco’s fraud,” said Scott Friestad, an associate director of SEC enforcement who oversaw its probe.

For a great discussion of this check out Why Do Lawyers Acquiesce In Their Clients’ Misconduct? – Part I, Part II, Part III, by Sung Hui Kim.

What responsibility do you think lawyers bear in past and present scandals?

Your comments—priceless

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