December 18, 2002

Securities and Exchange Commission
450 Fifth Street NW
Washington, D.C. 20549

Re: SEC Release No. 33-8150 (November 6, 2002)

Dear Sirs:

This is to express my support for your proposed rule requiring that counsel for publicly-held corporations both ladder-up their reports and report out evidence of fraud by agents of their corporate clients. The proposed rule provides considerable vitality to ABA Model Rules 1.2(d), 8.4(c) and 1.13 and should strengthen the pivotal role traditionally established for securities and other counsel for publicly-held corporations. Certainly the laddering up requirement should be more stringent than Model Rule 1.13 for lawyers that represent publicly-held companies. Moreover, the reporting out provision should also be more vigorously applied to lawyers representing publicly-held companies than by counsel representing companies that do not participate in our national markets. The proposed rule necessarily builds on the traditional duty to disavow documents the lawyer reasonably believes may further fraudulent conduct, as expressed in ABA Formal Ethics Opinion 92-366.

As a former securities law practitioner and as an academic who has continuously written in the field of professional responsibility of securities counsel, I urge you also to consider imposition on corporate counsel of ethical responsibilities to conduct random, modified due diligence inquiries on a continual basis to support and enhance corporate disclosure obligations and the consequential protection of investors. Numerous SEC Accounting and Auditing Enforcement Releases in recent years have reported fraudulent revenue recognition and other manipulative schemes that even rudimentary legal inquiries would have uncovered. Accordingly, I suggest that the final rule impose an affirmative duty to conduct random inquiries or, alternatively, provide, like Section 11 of the 1933 Act, an affirmative modified due diligence defense to professional misconduct charges.

Again, I compliment the SEC on its long overdue efforts to raise the ethical standards of lawyers for publicly-held companies. We are professionals who play a vital role in the marketplace by protecting our organizational clients and their investors. The proposed rule, particularly if modified to incorporate a short form due diligence standard, should greatly improve our ability to protect publicly-held corporations against agents who would succumb to various moral hazards and imperil our clients and their investors.

Very truly yours,

Manning G. Warren III
H. Edward Harter Chair of Commercial Law
Brandeis School of Law
University of Louisville