Tuesday, December 6, 2011
Katherine Franke (Columbia) on Occupy Wall Street...and Lawyers
This is bound to be widely discussed. Thoughts from professional responsibility scholars? Comments must be signed, full name and valid e-mail address.
I agree entirely with Prof. Franke that the role of lawyers in the financial crisis has not received sufficient attention. However, while individual cases may vary depending on the precise transaction and the knowledge of the relevant actors, credit default swaps and shorts of sub-prime mortgage assets are not illegal, and I do not see why even a public-minded attorney should have refused to assist clients in carrying out these types of transactions.
In my view, the problem is not that attorneys who represented financial industry clients were overzealous or insufficiently public-minded. It is that they simply did not care to know 1) Whether the institutions originating mortgages were following proper underwriting guidelines and 2)whether mortgage-backed securities might fall in value. Failing to carry out due diligence may constitute a violation of competence rules - and I expect to see some litigation against lawyers who represented issuers and investors in some of these transactions - but mere participation in the creation or acquisition of exotic financial products is not ethically problematic.
Posted by: Milan Markovic | Dec 6, 2011 1:28:25 PM
It is great to see interest building in this subject. At the Cornell Law School, we organized a conference two years ago aimed at initiating just this conversation among legal professionals in the financial markets--about what they could do, from the inside, to "stabilize the markets and change the world," as we put it, somewhat tongue in cheek. Information about this initiative is here.
We are in the process of putting together a little book on the subject aimed at financial lawyers. But if anyone is interested in building on this initiative or collaborating in any way, please let me know.
Posted by: Annelise Riles | Dec 16, 2011 4:44:06 PM
Many of the same views are expressed here:
Posted by: J. Lavitt | Dec 6, 2011 10:55:27 AM