Although most lawyers instinctively believe that the attorney-client privilege protects draft securities filings they author or review, some courts take the opposite approach. A surprising number of courts find that a lawyer’s input into draft securities filings amounts to business rather than legal advice, that the widespread internal circulation of drafts destroys the privilege, or that the drafts did not deserve protection because the company intended to publicly disclose the final version.
Fortunately, some courts analyze the privilege protection properly. In Roth v. Aon Corp., No. 04 C 6835, 2009 WL 57501 (N.D. Ill. Jan. 8, 2009), the court analyzed a draft section of Aon’s Form 10-K, which was prepared by the company’s CFO, sent to the company’s CEO and general counsel, and then circulated to another in-house lawyer and three Aon executives. The court concluded that (1) communications about complying with SEC regulations “are precisely the type of day-to-day guidance for which a corporation would likely rely on counsel,” which meant that the privilege protected the communications and the draft; (2) the circulation of the draft to those “directly concerned with the matter of the Form 10-K disclosures” did not destroy the privilege, because “[t]o disallow corporations the space to collectively discuss sensitive information with legal counsel would be to ignore the realities of large-scale corporate operation”; and (3) “a draft of a document which becomes public record does not thereby lose that privilege.” Id. at *3-4.
Lawyers involved in preparing SEC filings should take comfort in such a helpful analysis.