Earlier this year, the Securities and Exchange Commission filed an action against law firm Covington & Burling to force it to reveal which of its investment advisor and broker-dealer clients were affected by a 2020 cyberattack purportedly by Chinese military spies trying to learn about policy issues of interest to China.
The SEC says it wants the information to help it determine whether any of Covington’s clients “failed to disclose any material cybersecurity events in connection” with the hack.
Covington has strongly resisted providing the information about its clients, arguing that to do so would undermine the attorney-client privilege.
In this episode, Nicolas Morgan and Tom Zaccaro talk to Susanna McDonald, vice president and Chief Legal Officer at the Association of Corporate Counsel, about why the organization and others fear that the SEC action against Covington could have wide-ranging negative impacts on protecting privileged communications between lawyers and their clients in SEC matters.
The U.S. Chamber of Commerce, 83 major law firms, and the Association of Corporate Counsel, among others, submitted briefs in support of Covington’s position, and the federal court’s ruling is expected at any time after the SEC and Covington reported an impasse in their settlement negotiations.