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Ethics Keyed to Hazard
Klein v. Boyd
Facts
Drinker, Biddle & Reath (“Drinker”) was retained by William Coleman to assist in the formation and management of a new business entity, known as Mercer LP. Partner Robert Strouse, the attorney assuming responsible for the oversight of Mercer’s interests, became aware of Coleman’s long history of securities fraud and other serious violations, and prepared a disclosure letter to be read and signed by all of the partership’s investors that carefully outlined Coleman’s background. Although Coleman did not deliver it to all of the investors, Strouse only advised that it should be and continued the representation. When Plaintiffs-who never received the original letter-renewed their investment in November 1993, Strouse prepared another disclosure letter which purposely omitted the information regarding Coleman’s history. The partnership subsequently collapsed due to fraud and mismanagement, and the investors are now attempting to reclaim their money.
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