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Attorney settles claim that he shared info with accused CEO

The attorney-client privilege is among the most important bedrocks of the legal profession. A lawyer who practices in Los Angeles is supposed to represent his client, and no one else involved in a legal or business matter. That means that he or she does not go against his or her client’s interests, or share confidential information with outside parties without the client’s consent.

When an attorney violates this trust, he or she may cripple the chances of achieving the client’s goals. This may even rise to the level of legal malpractice.

A law firm in another state has settled a malpractice claim against it that was filed by the trustee in the bankruptcy case of a former beverage company. The firm has agreed to pay $23.7 million, after the trustee accused one of its attorneys of misrepresenting his clients and failing to supervise the lawyers who did the actual work.

The attorney was hired by members of the board of directors of LeNature’s Inc., a company that made flavored teas and other drinks. The board members suspected that the company’s CEO was embezzling funds and defrauding the business. The CEO is currently in federal prison for fraud, along with several of his relatives.

But the attorney failed to conduct a proper investigation into the CEO’s conduct. In fact, he allowed the CEO to influence the investigation itself, by briefing him and allowing him to edit the report to the board. He also failed to provide oversight for the lower-ranking attorneys at the firm who did a great deal of the work, according to the bankruptcy trustee.

Source: Pittsburgh Tribune-Review, “LeNature legal malpractice lawsuit settled for more than $23.7M,” Richard Gazarik, Jan. 28, 2014

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