From: Jerry Clousson [jclousson@lowis-gellen.com]
Sent: Wednesday, December 18, 2002 5:33 PM
To: rule-comments@sec.gov
Subject: S7-45-02
December 18, 2002 
  
Via Electronic Mail 
Mr. Jonathan G. Katz 
Secretary 
Securities and Exchange Commission 
450 Fifth Street, NW 
Washington, D.C., 20549 
  

Dear Mr. Katz: 

Thank you for the opportunity to provide comments to the Securities and 
Exchange Commission's ("Commission") proposed rule and commentary on the 
"Implementation of Standards of Professional Conduct for Attorneys" 
("Proposed Rule"). 

It is apparent that one of the purposes of the Sarbanes-Oxley Act of 2002 
and the Proposed Rule is to prevent the recurrence of recent events 
involving Andersen, Enron, Tyco and other companies involved in the current 
spate of corporate scandals.  Clearly, the actions and inactions of attorneys 
employed and retained by these companies have contributed to the scandals. 
The question remains-would the Proposed Rule have prevented or compelled a 
different result?  After reading the Proposed Rule, my answer to this 
question is no. 

The Proposed Rule presupposes that certain circumstances will rarely arise: 

· "The Commission is confident that supervisory attorneys will satisfy their 
reporting obligations under the rule, and that the instances when a subordinate 
attorney disagrees with the supervisory attorney's actions will be exceedingly 
rare." 

· "It should be truly extraordinary for an attorney reporting evidence of a 
material violation to receive an inappropriate response-one, for example, 
that simply asserted that the reported evidence is no cause for concern 
without any hint of evaluation or inquiry-or to receive no response at all 
within a reasonable time." 

·  "In the extreme and unlikely event that the issuer's audit committee, 
some other committee of the issuer's board of directors, or the full board 
of directors does not provide an appropriate response within a reasonable 
time, it may be essential for the reporting attorney to prepare and retain 
a contemporaneous written record documenting those circumstances." 

As recent events demonstrate, such circumstances are, unfortunately, not rare.  
It is therefore recommended that the Proposed Rule be modified to more 
appropriately address and more effectively deter such incidents. 

Furthermore, the Proposed Rule's amended standards of professional conduct 
are applicable to attorneys who are employed or retained by issuers. Attorneys 
who are employed or retained by public accounting firms are thus not subject 
to these amended standards.  It is therefore recommended that the Proposed 
Rule be modified to address the professional conduct of attorneys who represent 
entities that are subject to oversight or regulation by the Commission. 
  

Sincerely, 

Jerry Clousson 
Lowis & Gellen 
200 West Adams 
Suite 1900 
Chicago, Illinois  60606 
312-364-2500