Wilmer, Cutler, Pickering, Hale and Dorr was caught Wednesday in an email mix-up that revealed secret Securities and Exchange Commission and internal investigations at PepsiCo, after a Wilmer lawyer accidentally sent a Wall Street Journal reporter privileged documents detailing a history of whistleblower claims at the company.

The internal investigation revolves around PepsiCo’s 2011 acquisition of the Russian drinks company Wimm-Bill-Dann, and the departure of general counsel Maura Smith in 2012 following allegations of financial misreporting and other wrongdoing at PepsiCo. A subsequent SEC investigation into Smith’s dismissal, and whether the company fired her in violation of whistleblower laws, is “at an early stage,” the Journal reported.

The Journal’s story, published early Wednesday and titled “SEC Probes Departure of PepsiCo’s Former Top Lawyer,” outlined how its reporter learned details about the years-old internal investigation started by Smith and about the more recent SEC probe, for which Smith was subpoenaed. The information included an Aug. 31 memo about Smith’s subpoena and her contact with federal investigators that was “mistakenly sent by a WilmerHale attorney to a Wall Street Journal reporter as part of communication to other attorneys working on the matter,” the story said.

Wilmer’s explanation and apology, sent from a spokesman, came less than three hours after the Journal published its story. The law firm said it “inadvertently” leaked privileged information by email, then asked the Journal reporter to delete what he received. Wilmer accuses the Journal of going back on its word to delete leaked documents.

Wilmer’s statement reads like the legal profession’s worst nightmare:

We deeply regret that privileged documents were inadvertently emailed to a reporter at The Wall Street Journal. WilmerHale takes full responsibility, and we apologize to our client. We promptly advised The Wall Street Journal of the error and asked the reporter to delete the material. The reporter told us he had deleted the material, but we later learned he had printed and retained hard copies.

We are disappointed that The Journal has decided to publish private information it knew was protected by our client’s legal privilege. We are taking additional measures designed to ensure that emails are not misaddressed to unintended recipients.

An earlier version of the statement from Wilmer said “we have apologized” to our client.

Journal reporters Andrew Ackerman, Joe Palazzolo and Jennifer Maloney shared a byline on the story. Ackerman and Palazzolo cover financial regulation and law enforcement for the newspaper, while Maloney writes about the beverage industry.

Gibson, Dunn & Crutcher, according to the Journal story, appears to have conducted the company’s internal investigation following a whistleblower tip about Wimm-Bill-Dann. The Journal said the documents it received indicated that lawyers “found no conclusive evidence of more serious violations” of the Foreign Corrupt Practices Act but did find “potential violations” related to accounting that PepsiCo later addressed.

In additional to Wilmer, PepsiCo-side lawyers involved in the SEC investigation response include former SEC Commissioner Mary Jo White of Debevoise & Plimpton, the story said.

The documents mistakenly sent to The Wall Street Journal include a copy of a 2012 memo Gibson Dunn worked on for Smith that was intended for—but never got to—the PepsiCo board, according to the story. That memo accused company executives in Europe of not vetting the Wimm-Bill-Dann deal correctly. Smith left the company eight days after the memo was drafted “to pursue other opportunities,” PepsiCo said at the time.

Less than a week later, the Fortune 50 company announced former Deputy Attorney General Larry Thompson would become general counsel and head of government affairs, a position he had left a little more than a year before. Tony West, the No. 3 lawyer in the Justice Department during some of the Obama years, has been PepsiCo’s general counsel and head of government relations since 2014. Thompson moved to private practice at Finch McCranie, a white collar boutique in Atlanta, in 2015.

PepsiCo’s $3.8 billion partial acquisition of Wimm-Bill-Dann brought in legal counsel from Davis Polk & Wardwell in the U.S. alongside Linklaters and Dechert in Russia, according to prior coverage by The American Lawyer. Latham & Watkins advised Wimm-Bill-Dann.

Though it wasn’t named in that tie-up, Wilmer has been in the mix of PepsiCo outside counsel for transactional business previously. A 2006 brochure on Wilmer’s mergers and acquisitions work touted how the firm served as “counsel of choice” on PepsiCo’s acquisition of Stacy’s Pita Chip Company.

The Wall Street Journal story did not name any private practice lawyers working for PepsiCo on the SEC or internal investigations matters, other than White at Debevoise. The story further asserted that the SEC investigation “may not lead to any enforcement action” and attributed that information to people familiar with the documents.

PepsiCo said in its statement to the Journal that it did not retaliate against Smith, that the company was cooperating with the SEC and found no “material” misconduct at Wimm-Bill-Dunn that would affect the company’s financial disclosures.

Smith left PepsiCo with a $10.6 million severance package and a non-disparagement agreement, according to an SEC filing. Previously general counsel for a General Electric subsidiary, for building materials company Owens Corning and for International Paper, she had been in the position at PepsiCo for 13 months. She now has her own solo law firm in New Canaan, Connecticut, and New York City that provides mediation and arbitration services.

 

Katelyn Polantz is based in Washington, D.C., and writes about government and the business of law. She can be reached at kpolantz@alm.com. On Twitter: @kpolantz. Brian Baxter contributed to this story.