Attorneys — in-house and outside counsel alike — often stand at the crossroads of corporate misconduct. At one time, attorneys’ duty to maintain corporate clients’ confidences was thought to be virtually absolute. But that changed over time, as relevant rules and laws gave lawyers greater discretion to make public disclosures to avert clients’ anticipated or ongoing wrongdoing. And now, since the enactment of the whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, attorneys will sometimes have not only discretion and employment protections, but also a financial incentive to blow the whistle.

Imagine this scenario: You are in-house counsel to a public corporation. In the course of your legal work, you discover that your employer — your client — is making materially false statements about the corporation’s financial performance in its soon-to-be-filed annual report. You have reported the problem up the issuer’s chain of command and tried to persuade your client to correct the false statements. Can you report your client’s misconduct to the Securities and Exchange Commission, and what will happen if you do so?

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