Up-the-Ladder Reporting and Professional Responsibility (U.S.)

Summary

This practice note sets out the "up-the-ladder reporting" obligation of counsel in the U.S. to report certain unlawful acts of employees of a corporation to progressively more senior levels within the corporation, up to and including the ultimate authority in the corporation, its board of directors. Specifically, it looks at the Sarbanes-Oxley Act of 2002, 15 U.S.C. 7245 ("SOX"), in which the Securities and Exchange Commission ("SEC") has authority to make rules setting forth minimum standards of professional conduct for attorneys appearing and practising before the Commission including up-the-ladder reporting. Finally, it also expounds on how the client of a legal counsel for a corporation is the corporation itself and not the corporation's directors, officers, employees, agents or other representatives.