From: jeff.fisher@bt.com
Sent: Wednesday, December 11, 2002 5:13 AM
To: rule-comments@sec.gov
Subject: File No. 33-8150.wp- (s7-45-02) Comments on Proposed Rule:
Implementation of Standards of Professional Conduct for Attorneys

1.	Definition of "Material Violation" - it is stated that the
Commission believes that the term covers violations of the federal
securities laws, as well as violations of state securities laws. The
Commission will appreciate that lawyers in overseas jurisdictions have a
limited knowledge of US federal and states securities laws. They rely on
advice provided by US law firms.  In the section entitled "Reporting within
the Issuer Evidence of a Material Violation" it is acknowledged that:
"Attorneys are not necessarily expected to identify issues they are equipped
to see.  What the reasonable, experienced securities lawyer might regard, as
a clear violation of the law may appear different - or not appear at all -
to an unseasoned attorney with a different level of expertise".  It would be
helpful if the Commission would acknowledge in the release that overseas
lawyers are unlikely to have an extensive knowledge of US securities laws
and will not be expected to have the knowledge of an experienced US
securities lawyer.  

			The Commission might also consider specifying the
provision or provisions of US securities laws that it would expect an
overseas lawyer to be acquainted with.  For example, if would be possible to
state that an overseas lawyer would  be expected to recognise a material
violation of the obligation in rule 10b-5. 

			A material violation also occurs where there is a
"material breach of fiduciary duty".  The draft rules define this to mean
breach of fiduciary duty at common law, including, misfeasance, nonfeasance,
abdication of duty, abuse of trust, and the approval of unlawful
transactions.  The common law of breach of fiduciary duty has developed in
different ways in different jurisdictions and English concepts of "breach of
fiduciary duty" by directors are not the same as those in the US.  The
Commission should recognise that UK directors will be judged against
domestic standards of "breach of fiduciary duty" and not US standards.  It
is not, therefore, appropriate to expect overseas lawyers to judge directors
of foreign issuers by the standards of US common law relating to "breach of
fiduciary duty", as directors of foreign issuers have no obligation to
comply with those requirements.

			Material violation also includes "a similar material
violation".  It would be helpful if the Commission could clarify whether the
term "similar violation" would extend to violations of law in the legal
jurisdiction of the foreign issuer.

2.	Breach of confidence - Attorneys who have not received an
appropriate response and who reasonably believe that the reported material
violation is ongoing or is about to occur and is likely to result in
substantial injury to the financial interest of the issuer or of investors
are required to disaffirm any submission to the Commission.  The draft rules
also allow an attorney to reveal confidential information to the extent
necessary to prevent the commission of an illegal act which the attorney
reasonably believes will result in either perpetration of a fraud upon the
Commission or in substantial injury to the financial or property interests
of the issuer or investors.  

		The Commission will appreciate that a provision which
exempts an attorney from liability in the US for breach of confidentiality
would not necessarily protect an attorney in an overseas jurisdiction.  The
rules of the Law Society of England and Wales provide that disclosure of a
client's confidences which is unauthorised by the client or by the law could
lead to disciplinary proceedings against a solicitor and could also render a
solicitor liable, in certain circumstances, to a civil action by the client
arising out of the misuse of confidential information.  The rules also make
it clear that the duty of confidentiality does not apply to information
acquired by a solicitor where he or she is being used by the client to
facilitate the commission of a crime or fraud.  Similarly the English courts
have allowed a defence of public interest in an action for breach of
confidence where there has been "serious misdeeds or grave misconduct".  As
it is unclear whether the Law Society and the English courts would allow a
breach of confidence to take place in the circumstances described in the
Commission's draft rules, I would request that the Commission consider
exempting overseas lawyers from the requirement to disaffirm submissions to
the Commission

Jeff Fisher
Solicitor
Head of Corporate Law
BT Group Legal
Tel: +44 020 7356 4830
Fax: +44 020 7356 6447
E-mail: jeff.fisher@bt.com
BT Group plc
Registered Office:
81 Newgate Street
London EC1A 7AJ
Registered in England No. 4190816

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