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Securities lawyers are gearing up for a rule-making frenzy at the SEC. The Sarbanes-Oxley Act, which became law at the end of July, calls for extensive new regulations covering public companies, their auditors, and, to a lesser extent, their counsel. Several private attorneys are warily eyeing that last aspect-rules that will govern lawyers who practice before the commission. The process of writing the new regs will be intense, say securities experts and former SEC officials. Interested parties will submit on-the-record “comments,” as well as engage in more informal lobbying. “The law presents the SEC with a very long list of things to do, under very tight deadlines,” says John Olson. A securities expert and partner in the D.C. office of Los Angeles-based Gibson, Dunn & Crutcher, he is also chair of the American Bar Association’s corporate governance committee. “What Congress has produced is a bit of a dog’s dinner,” he adds, noting that some provisions overlap and in certain cases appear to contradict one another. The task, as usual, will be to figure out what Congress meant. Among many other things, the new law requires the SEC, within 180 days from enactment, to set standards of conduct for attorneys. The law also specifies that lawyers who learn of “material” misconduct at a client company must inform senior executives, and ultimately the board, if management fails to respond “appropriately.” As it works out the exact wording of the new regs, the SEC can expect to get plenty of outside advice. Numerous agency veterans now in private practice are expected to make their cases to the commission, including Olson and James Doty, a former SEC general counsel now with the D.C. office of Baker Botts. Also weighing in: Stanley Keller and Dixie Johnson, the chair and vice-chair, respectively, of the ABA’s committee on federal securities regulation. Keller, a corporate partner at Boston’s Palmer & Dodge, says that he has already had “some preliminary discussions” with the SEC regarding the new rules. He suggests that while it may make sense for the SEC to craft additional standards for lawyers, the agency ought to let the states enforce such rules. “I would hope the ABA would work closely with the SEC to draft rules that meet the congressional intent, but also fit into the matrix of state ethics rules,” he says. Johnson, a D.C.-based securities partner with New York’s Fried, Frank, Harris, Shriver & Jacobson, echoes this point. “Anytime you rush [on legislation], you make mistakes,” she says. “I have been very comfortable with the states regulating lawyers’ ethics.”

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