Title: Matter of Silverman
Citation: 113 N.J. 193, 549 A.2d 1225
Docket Number: N/A
State: new-jersey
Issuer: new-jersey Supreme Court
Date: October 28, 1988

113 N.J. 193 (1988) 549 A.2d 1225 IN THE MATTER OF MELVIN SILVERMAN, AN ATTORNEY AT LAW. The Supreme Court of New Jersey. Argued March 1, 1988. Decided October 28, 1988. *195 William R. Wood, Deputy Ethics Counsel, argued the cause on behalf of Office of Attorney Ethics. Roger A. Lowenstein argued the cause for respondent (Dickson, Creighton &amp; Lowenstein, attorneys). PER CURIAM. The unethical conduct at issue in this disciplinary proceeding arises out of respondent's participation in a business venture *196 with a former client and his testimony in the civil proceedings that resulted from it. The record before the Disciplinary Review Board (Board) consisted of a Presentment filed by the District IIB Ethics Committee (Committee), a detailed stipulation of facts entered into by respondent and the Office of Attorney Ethics (OAE), the proceedings and decision of the Client's Security Fund, and the record of the aforementioned civil trial. The Board concluded respondent had entered into an employment relationship with a client in violation of DR 5-101(A), conducted a business transaction with a client in violation of DR 5-104(A), committed numerous misrepresentations in the course of that transaction in violation of DR 1-102(A)(4), and had made several false statements under oath. Despite respondent's otherwise unblemished record both prior to and since the relevant events in this case, the Board recommended disbarment. Our careful and independent review of the record leads us to accept in part and reject in part the Board's findings and recommendation. The Board's findings regarding respondent's misrepresentations and participation in a business transaction with a client are amply supported by the record, and indeed by multiple concessions found in the stipulation and respondent's brief. Further, we are in partial agreement with the Board's conclusions concerning the accuracy of respondent's sworn testimony. We cannot agree, however, that clear and convincing evidence establishes an attorney-client relationship concerning the relevant transaction, nor can we conclude that disbarment is warranted. Due to several mitigating factors, our judgment is that respondent's six-year suspension constitutes a discipline sufficient to protect the public. Respondent was admitted to the bar of this State in 1970, and to the bar of the United States Patent and Trademark Office *197 two years later. His practice has consisted almost exclusively of matters in the patent field and has provided him with a modest income. Events relevant to this case began in late 1978 and were detailed by the Board as follows: Respondent contended the failure of HLW was caused by Waters' fraudulent misrepresentations regarding its assets and liabilities; in the bankruptcy litigation Waters was sued by the trustee and settled the action with a payment of $50,000. Meanwhile, in consolidated civil proceedings, Liberty sought to foreclose against the 212-acre West Milford property that had been transferred to Eastern, while the Ferbers' estates asserted claims against Silverman for fraud and sought to invalidate the various mortgage agreements and Eastern debts. In that action Liberty recovered the full amount of the loan, and the Ferbers were awarded a $267,500 judgment against Silverman covering all losses to the estates. As of April 1987 respondent, through continuing monthly installments of $400 to $600, had paid off approximately $30,000 of the outstanding liabilities.[1]*206 No criminal proceedings were instituted, and a petition by Ferber's estate for recovery from the Client Security Fund resulted in the Fund declining to make any award. On June 24, 1982, shortly after judgment had been rendered in the civil action, respondent consented to a voluntary suspension of his plenary license to practice. The Patent and Trademark Office, however, authorized respondent to continue practicing in agency matters, pending final outcome of this proceeding. Since then respondent has practiced before the Patent and Trademark Office without incident.[2] In order to simplify the proceedings before the District Ethics Committee, respondent and the OAE prepared a stipulation laying out the transaction and respondent's role. The stipulation included respondent's acknowledgment that the facts and conclusions "demonstrate unethical conduct * * * which warrants public discipline." Subsequently, on November 19, 1986, the Ethics Committee commenced a hearing at which only respondent testified, and thereafter issued a presentment recommending public discipline. The presentment, dated February 27, 1987, charged that respondent had entered into a business transaction with a client who was relying on him to exercise his professional judgment, without making full disclosure or obtaining proper consent, in violation of DR 5-104(A), and that numerous instances of his conduct throughout the transaction amounted to violations of DR 1-102(A)(3) and (A)(4), rules proscribing, respectively, conduct "that adversely reflects on * * * fitness to practice law" and that "involv[es] dishonesty, *207 fraud, deceit, or misrepresentation."[3] However, the Committee rejected charges that respondent had perjured himself before the client security fund and/or in the consolidated civil proceedings. Further, notwithstanding claims of the OAE to the contrary, the committee ruled that DR 5-101(A), a provision barring the acceptance of employment under circumstances likely to result in a conflict, was inapplicable due to the absence of any "factual basis for the conclusion that [respondent] affirmatively undertook to represent" anyone other than himself in the HLW acquisition. The Disciplinary Review Board agreed with Committee's findings concerning DR 1-102(A)(3), (4) and DR 5-104(A), but differed with respect to its conclusions regarding respondent's alleged violations of DR 5-101(A): The Board also disagreed with the Committee's rejection of the OAE's assertion that respondent had perjured himself, finding that "the record * * * demonstrates that respondent, on more than one occasion, knowingly made false statements under oath to avoid liability for his actions." Its findings in this regard were based on a comparison between portions of respondent's testimony before the Client Security Fund and in the aforementioned consolidated civil proceedings, and statements in the stipulation: Turning to the appropriate discipline, the Board noted respondent's contention that his conduct was affected by his "obsession" and "frenzy" to purchase HLW, but discounted its significance. Citing its findings concerning respondent's allegedly false testimony, the Board reasoned that his "unethical behavior was not limited to this one `unfortunate period' in 1979." In sum, the Board concluded that despite "respondent's prior unblemished record, the totality of his misconduct leaves [us] without any confidence that respondent could ever again practice *210 law in conformity with the standards of the profession," and consequently, recommended disbarment. Ten years ago this Court reiterated Justice Jacobs' advice "that society might be `better served if practicing attorneys were to remain full-time lawyers rather than become part-time businessmen.'" In re Palmieri, 76 N.J. 51, 53 (1978) (quoting In re Carlsen, 17 N.J. 338, 346 (1955)). This warning was premised on the fact that attorneys who choose to engage in commercial pursuits do not "shed in chameleon fashion" their status and concomitant professional obligations. In re Carlsen, supra, 17 N.J. at 346. Rather, such "[a]ttorneys are held to a higher standard than that of the market place * * * [and their] conduct must measure up to the high standards required of a member of the bar even if [their] duties in a particular transaction do not involve the practice of law." In re Reiss, 101 N.J. 475, 488 (1986); accord In re Smyzer, 108 N.J. 47, 57 (1987); In re Hurd, 69 N.J. 316, 330 (1976). Our independent review of the facts admits of no conclusion other than that respondent committed numerous ethical transgressions, demonstrated by clear and convincing evidence in the record. In his zeal to obtain adequate financing to consummate the acquisition of HLW, respondent prepared various statements and documents containing knowing misrepresentations of highly material facts. For example, in the prospectus, containing both his and Ferber's financial statements, and on the Liberty Loan application, respondent exaggerated or created non-existent assets and ignored or understated significant liabilities. Respondent altered the net income figure of the Kaufman 1978 HLW financial statement and, along with the prospectus, submitted it to the Weir group; respondent also altered, without Ferber's knowledge, a key figure on the closing memorandum agreement dictated by Robertson. *211 Further, several misrepresentations were effected by omissions on respondent's part: (1) in his June Twelfth letter to Waters respondent enclosed the Liberty commitment letter without disclosing that it had been revoked; (2) at the closing respondent signed the Robertson memorandum, which stated inter alia that there had been no material adverse change in HLW's financial condition since the first of the year, but failed to reveal that he had executed an agreement with Waters acknowledging the alleged existence of such adverse change; and (3) respondent withheld from Ferber and Robertson many of the details concerning side agreements he had made with Mento, Weir, and others that affected the stability of HLW. Respondent also acquiesced in Ferber's forgery of his wife's signature on the Manufacturers Hanover loan guarantee. These omissions and affirmative misrepresentations, intended by respondent to induce favorable decisions by the various parties, were egregious and fraudulent and constituted clear violations of DR 1-102(A)(4).[5] Moreover, several of these incidents were, in all likelihood, criminal acts adversely reflecting on respondent's fitness to practice, and thus constituted independent violations of DR 1-102(A)(3).[6] See N.J.S.A. 2C:21-7 h (fourth degree offense to "make a false or misleading statement for the purpose of obtaining * * * credit"); N.J.S.A. 2C:21-1 a(1-3) (fourth degree offense to (1) alter or change "the writing of another without his authorization," or to utter a writing known to have been executed "so that it purports to be the act of another who did not authorize that act."). *212 Respondent offers various asserted justifications and explanations for these actions. At the Committee hearing respondent testified that while at the time he prepared the prospectus he realized Ferber had apparently supplied him with false financial information, it was not until Robertson became involved that he "had any way of knowing definitely, absolutely." And then, despite written notification from Robertson regarding specific errors, respondent stated, "I was not about to say to Liberty `please revoke your commitment. There's been a material misrepresentation in Ferber's net worth,' particularly in that Liberty had their own appraisal done of the collateral property." Concerning the alterations of the Kaufman financial statement, respondent testified that he felt the use of a cash basis to compute HLW's 1978 net income represented "a calculated effort [by Waters' attorney] to torpedo the transaction," and that the new figures, derived from an accrual basis analysis provided to respondent by his accountant, were legitimate. Further, with respect to the alteration of the closing memorandum prior to Ferber executing it, respondent suggested that the figures supplied by Robertson were based on a miscalculation of Ferber's unsecured exposure on the loan, and that Robertson himself had previously assented to the validity of the corrected figure. Finally, as far as his failure to tell Ferber and Robertson of the Waters' closing memorandum alleging that adverse change in HLW's finances had occurred, respondent expressed that he considered the change immaterial, such that the "no material change" representation in the Robertson closing memorandum was more accurate. Quite clearly, respondent's rationalizations for these acts are unavailing, and neither lessen their seriousness nor constitute a defense. DR 1-102(A)(4) simply proscribes conduct that knowingly is dishonest, fraudulent, deceitful, or involves misrepresentation. E.g., In re Kotok, 108 N.J. 314, 327 (1987) (providing knowingly false answer on handgun permit application, even if not done with "obvious purpose to mislead," violates DR 1-102(A)(4)); see In re Servance, 102 N.J. 286, 294 *213 (1986) (DR 1-102(A)(4) violated where attorney represented investments were sound although "he knew little or nothing about them"). "A lack of honesty is a serious character flaw, intolerable in the professional makeup of an attorney." In re Pleva, 106 N.J. 637, 645-46 (1987). Respondent's personal belief that the information he misrepresented and/or concealed from the other parties was insignificant under the circumstances no more negates the improper and unethical nature of these acts than does the fact that an attorney who misappropriated client funds merely intended to borrow rather than steal. See, e.g., In re Warhaftig, 106 N.J. 529, 533-34 (1987); In re Noonan, 102 N.J. 157, 159-160 (1986). As for preparation of the prospectus and financial statements, even if we credit respondent's testimony that at the time he only suspected Ferber had provided him with incorrect financial information, his decision to submit the documents to Liberty without even attempting to verify the validity of such information evinces a sufficiently reckless disregard for the truth of the prospectus to constitute dishonest and deceitful conduct. E.g., In re Servance, supra, 102 N.J. at 294; In re Wolk, 82 N.J. 326, 329 (1980). Furthermore, respondent misrepresented information concerning his own financial position on the prospectus. We also find, as did both the Committee and the Board, that respondent's entire course of conduct in dealing with Ferber clearly violated DR 5-104(A), a rule instructing that lawyers "shall not enter into a business transaction with a client if they have differing interests therein and if the client expects the lawyer to exercise his professional judgment therein for the protection of the client, unless the client had consented *214 after full disclosure."[7] Although at the time respondent first discussed the HLW transaction with Ferber he was not actively representing him in a specific matter, it is clear that the two related to each other generally as attorney and client. It is also clear that it is the substance of the relationship, involving as it does a heightened aspect of reliance, that triggers the need for the rule's prescriptions of full disclosure and informed consent. See In re Wolk, supra, 82 N.J. at 332-33; In re Makowski, 73 N.J. 265, 268-69 (1977); In re Hurd, 69 N.J. 316, 329-330 (1976). Hence, there is little doubt that respondent engaged in a business transaction with a client; indeed, he conceded as much in his testimony before the Committee when he stated that he felt Robertson's appointment "removed [him] from the attorney role vis-a-vis Ferber." The dynamics of the transaction clearly gave rise to differing interests on Ferber's and respondent's behalf, as the two were in effect aligned, respectively, as lender and borrower. See In re Smyzer, supra, 108 N.J. at 54-56 (differing interests involved where attorney counseled clients to invest in financially-troubled companies in which he held an interest); In re Wolk, supra, 82 N.J. at 333-34 (DR 5-104(A) applicable where client invested $10,000 on second mortgage for rental property owned in part by attorney); In re Makowski, supra, 73 N.J. at 267-69 (DR 5-104(A) applied to loans from client to attorney). Further, Ferber was undoubtedly relying throughout on respondent's good judgment; the record reveals that even at the *215 closing, long after Robertson had been retained, Ferber felt he could act on respondent's advice. Cf. In re Servance, supra, 102 N.J. at 294 (history of honesty and faithfulness leads clients to trust attorneys with their property); In re Palmieri, supra, 76 N.J. at 59 (evidence failed to support any inference that asserted client relied on respondent "in any professional capacity"). Before the Committee respondent conceded that although at the time of the transaction he viewed Ferber strictly as a co-venturer, in retrospect "there can be no question" that Ferber relied upon him in a personal capacity and as an attorney. Hence, inasmuch as respondent entered a business transaction with a client, where the two had differing interests and the client relied on him to exercise good judgment for the client's protection, it was incumbent on him to make full disclosure concerning all aspects of the transaction. E.g., In re Smyzer, supra, 108 N.J. at 54-56; In re Wolk, supra, 82 N.J. at 332-34; In re Makowski, supra, 73 N.J. at 268-69. Unlike the concealment involved in Smyzer, supra, respondent's interest in the HLW transaction was fully disclosed. However, from the onset of negotiations with Ferber he failed to reveal important details of his arrangements with the other parties, details that significantly affected HLW's prospective cash flow and thus directly related to the financial soundness of the deal as far as Ferber's interests were concerned.[8]See In re Wolk, supra, 82 N.J. at 332 (DR 5-104(A) violated where respondent told client of interest in transaction but failed to disclose crucial, adverse *216 financial information); In re Makowski, supra, 73 N.J. at 269 (failure to disclose specifics of loan transactions with client violates DR 5-104). Respondent thus clearly failed to "take every possible precaution in ensuring that his client [was] fully aware of the risks inherent in the proposed transaction." In re Smyzer, supra, 108 N.J. at 55. Respondent of course did, sometime in mid-April 1979, advise Ferber to retain independent counsel. The fundamental ethical objective at stake, however, dictates that such advice should have been given to Ferber in January 1979 when the two first discussed the possibility of joint participation in acquiring HLW. See Smyzer, supra, 108 N.J. at 54-55 (attorney contemplating business transaction with client "must carefully explain * * * the need for independent legal advice"); In re Wolk, 82 N.J. at 334 (counsel "should have insisted" client retain independent counsel); In re Hurd, 69 N.J. at 329 (although no attorney client relationship existed, counsel should have refused to go forward with transaction until independent legal advice had been obtained). As we explained in Wolk, supra: Here the record reveals that before respondent advised Ferber to retain independent counsel, the two had negotiated the specifics of Ferber's end of the deal and implemented the transfer of Ferber's real estate to Eastern. Further, respondent had allowed Ferber to participate in the submission of the fraudulent prospectus to Liberty. The importance of obtaining outside counsel prior to these events is painfully clear. Cf. Wolk, supra, 82 N.J. at 334 (noting pitfalls of transaction that independent counsel would have discovered). Nor did Ferber's retention of Robertson cure respondent's violation of DR 5-104(A), since his subsequent concealment of material information effectively neutralized Robertson's usefulness to Ferber. Cf. Smyzer, supra, 108 N.J. at 55 (disclosure *217 requirement not satisfied by pro forma suggestion regarding outside counsel); In re Wolk, supra, 82 N.J. at 333 (rejecting sufficiency of advice concerning outside counsel "designed to protect [respondent] rather than his client"). Respondent's decision to withhold financial data because he felt that they (a) were unimportant as far as Ferber's interests, or (b) would lead Robertson to "torpedo the deal," preempted the precise tasks outside counsel is charged with in such situations. The Rule pre-supposes that counsel's interest in the transaction renders him objectively incapable of deciding what information is important as far as his client/co-venturer's interests are concerned, and whether or not he should consummate the transaction. Rather, these tasks are best left to outside counsel, who should advise against moving forward if it is determined that the transaction is not in the client's best interests. The Board, as noted above, rejected the Committee's finding that no specific attorney-client relationship existed concerning the HLW acquisition, and concluded that aside from DR 5-104(A) respondent had also violated DR 5-101(A). Supra at 207-209. This rule focuses on the propriety of an attorney-client relationship itself, and requires full disclosure and client's consent if the lawyer's professional judgment concerning the subject matter of the employment relationship "will be or reasonably may be affected by his own financial, business, property, or personal interests." DR 5-101(A).[9] In addressing this issue the Board properly looked to In re Palmieri, supra, where, while noting that representation is essentially "`an aware consensual relationship,'" we stressed that an attorney's acceptance of obligations in his professional capacity "need not necessarily be articulated, in writing or speech but may, under certain circumstances, be inferred from the conduct of the parties." 76 N.J. at 58-59; see In re *218 Makowski, supra, 73 N.J. at 268-69. The Ethics Committee concluded that in seeking to acquire HLW respondent represented no one but himself, and further, found no factual basis to infer any affirmative undertaking to represent Ferber. The Committee expressed the view that However the Board, citing respondent's attempts to delay adverse action by various mortgagees, attempts to help Ferber obtain additional mortgage monies, and preparation of the deed and corporate resolutions involved in transferring the property to Eastern, concluded that respondent had "affirmatively represented" Ferber. Although the matter is not free from doubt, on a close and careful examination of the record we differ with the Board to the extent it determined there was an attorney-client relationship between respondent and Ferber with respect to the transaction itself. We conclude that the existence of such a specific professional relationship within the meaning of DR 5-101(A) is not supported by clear and convincing evidence. However, limited to the specific matters cited by the Board, we agree that respondent entered into an attorney-client relationship with Ferber. Looking first at Ferber's participation in the transaction, the record neither suggests that any express employment agreement existed between the two, nor does it sufficiently establish a professional relationship by implication. See In re Palmieri, supra, 76 N.J. at 59 (proof insufficient to infer existence of attorney client relationship). Respondent had never performed corporate or commercial work for Ferber; indeed Ferber knew he practiced exclusively in the field of patents. Moreover, Ferber knew from the outset that the objective of the transaction was to procure sufficient financing for respondent *219 to purchase HLW. Thus whether or not Ferber was a sophisticated businessman, as respondent contends, it is difficult to imagine that Ferber could reasonably have assumed respondent was acting as his attorney in negotiating the terms of the acquisition. Cf. Ellenstein v. Herman Body Co., 23 N.J. 348, 353 (1957) (noting importance of inferring what parties contemplated in deciding whether a professional relationship was established). Compare In re Wolk, supra, 82 N.J. at 330-35 (no DR 5-101(A) violation found where client knew of attorney's interest in transaction) with In re Makowski, supra, 73 N.J. at 267-69 (finding attorney-client relationship and violation of DR 5-101(A) where client was wholly unaware of counsel's interest in investments). The hypothesis that the parties contemplated that respondent would act as Ferber's counsel regarding his participation in the transaction is further rebutted by Ferber's subsequent decision to retain Robertson, and indeed by evidence indicating that even before obtaining Robertson as independent counsel Ferber had sought other outside legal and financial advice. However, we find that an attorney-client relationship did arise by implication regarding the collateral matters cited by the Board. Respondent's preparation of the deed and corporate resolutions used to transfer Ferber's property to Eastern were peculiarly legal tasks carried out by respondent primarily for Ferber's benefit, i.e., so that Ferber could carry out his side of the bargain by mortgaging his land. Respondent's undertaking to provide the requisite legal skills for Ferber triggered the obligations of a professional relationship. In re Makowski, supra, 73 N.J. at 269 (citing Shoup v. Dowsey, 134 N.J. Eq. 440, 475-80 (Ch. 1944)). Respondent's actions in negotiating with various mortgagees in order to delay action in foreclosure proceedings and in seeking a small loan for Ferber are more difficult to evaluate, as they were activities that a lay co-venturer could rightfully pursue in the interest of furthering the enterprise. The mere *220 fact that these activities are often undertaken by an attorney acting in his professional capacity does not in itself, in such a situation, create an employment relationship. Cf. Ellenstein v. Herman Body Co., supra, 23 N.J. at 352 (attorney-client relationship not created simply because attorney deploys legal knowledge in completing work "which inherently is not the practice of law"). We are convinced, however, that Ferber believed respondent would exercise his legal skills for his benefit in carrying out these collateral tasks, and effectively relied on him to act as his attorney. Cf. In re Palmieri, supra, 76 N.J. at 60 (imposition of professional obligations requires "identifiable manifestation" that client relied on attorney in his professional capacity). Nevertheless, despite our agreement with the Board that respondent entered into a limited professional relationship concerning these various matters, we do not find that such representation violated DR 5-101(A). As noted above, Ferber was aware of respondent's role as a principal from the outset, but was satisfied with respondent's professional role in these tasks. Thus, Ferber impliedly consented to the limited attorney-client relationship. Further, with regard to these specific ministerial tasks, there is no evidence that Ferber's and respondent's interests were different. Therefore, we are not persuaded that there was, or reasonably could have been, an adverse effect on respondent's professional judgment.[10] Hence, we cannot conclude by clear and convincing evidence that respondent's actions in carrying out these collateral tasks violated DR 5-101(A). We partially differ with the Board's conclusion that the record established clearly and convincingly that respondent was *221 guilty of making knowingly false statements under oath in the Liberty/Ferber civil action and Client Security Fund proceeding. Our disagreement here results not from any clear error by the Board, but simply from our duty independently to scrutinize the record in disciplinary matters, as well as the inherent difficulty of proving false swearing charges. As noted by the Board, respondent's June Twelfth letter to Waters' attorney outlining the committed funding sources was given to Ferber but not to Robertson, and respondent has stipulated "it was improbable" that Ferber would forward the document to Robertson. However, at the 1982 trial respondent testified that he told Ferber to give the document, along with other materials, to Robertson, and that he assumed Ferber would do so. Further, although respondent stipulated that Ferber recognized Robertson would counsel against the deal and agreed "to take care of" him, respondent testified at the Client Security Fund hearing that he "had no idea that Mr. Ferber was not communicating the substance of our various discussions to his attorney." We cannot conclude that this constitutes clear and convincing evidence that respondent knowingly lied under oath. The testimony related to respondent's recollection of his state of mind in 1979 regarding Ferber's state of mind concerning what Ferber might or might not do with a package of materials. The record indicates that Ferber and Robertson were in frequent contact during this period, and despite respondent's conceded knowledge that Ferber intended to keep Robertson somewhat at a distance, he may well have believed when testifying that the substance of their discussions was being relayed to Robertson, including the fact that Ferber had received the above-mentioned package of materials. Further, the transaction at issue was somewhat complex, involving multiple parties and a large number of relevant dates, events, and documents; yet some of the pertinent testimony was framed in terms of generalities and thus imprecise. Respondent's recognition today that it was unlikely Ferber would give the June Twelfth Waters' letter to *222 Robertson, and that therefore his testimony was incorrect, does not ineluctably lead to the conclusion that he believed it was false when given. See N.J.S.A. 2C:28-2a (false swearing requires contemporaneous belief that testimony is false); State v. Boratto, 80 N.J. 506, 515 (1979) (same). The other asserted incident of false testimony invoked by the Board, concerning respondent's role in the alteration of the Kaufman 1978 HLW financial statement, is not so easily explained. Respondent admits that he removed various pages from the statement and inserted a statement he prepared with a different net income figure, derived from a report compiled by his accountant using accrual-basis analysis. The alteration of this document was a topic of some concern at the 1982 trial, and came up at several points in respondent's testimony. Initially, respondent flatly denied he had altered the statement, but seemed to concede it had been tampered with prior to its submission to Liberty and the Weir Group: *223 Yet at two subsequent points, once during cross-examination and once on redirect, respondent denied having any knowledge of the alteration whatsoever: To be sure, this testimony was elicited from respondent in his capacity as a civil defendant, in the course of a complex trial spanning three weeks. Indeed, before the Ethics Committee respondent suggested that he was confused at trial when confronted with these documents. Primarily, however, respondent asserts that while testifying at trial he believed the inserted page had been "developed by Herman as part of his analysis," and thus when he denied preparing the inserted page himself, it was not knowingly false testimony: We find respondent's explanation of the testimony not credible. His assertion that at the time he believed Herman had prepared the page is belied by his testimony during another point in cross-examination: Moreover, even if respondent did mistakenly believe at the time of trial that Herman had prepared the page and that he had only attached it to the Kaufman statement, he could not truthfully testify that he had never seen the altered document before the case started, and that he never changed any of the financial information given to him by Tannenbaum. See supra at 222. Hence, on this matter we agree with the Board that respondent gave knowingly false testimony. See, e.g., State v. Boratto, supra, 80 N.J. at 515 (witness' contemporaneous knowledge of falsity "may be inferred from surrounding circumstances," such as "the objective falsity itself, a motive to lie, or facts tending to show generally that defendant knew that his affirmation was false"); see also In re Reiss, supra, 101 N.J. at 491 (finding that attorney had filed knowingly false certification where he previously had represented the plaintiff in a different civil action but filed a certification denying he had ever represented the plaintiff in order to enable him to continue representing defendant). We turn now to the appropriate discipline. Our primary objective is, as always, protection of the public and preservation of its confidence in the integrity of the bar, rather than punishment of the errant attorney. E.g., In re Stier, 108 N.J. 455, 460 (1987); Matter of Noonan, supra, 102 N.J. at 165; In re Kushner, 101 N.J. 397, 400 (1986); In re Wilson, 81 N.J. 451, 456 (1979). We examine the nature of the crime or misconduct and the extent to which it arises out of or relates to the practice of law, and consider pertinent evidence of mitigation. See *225 Stier, supra, 108 N.J. at 457; In re Kotok, supra, 108 N.J. at 327; In re Kushner, supra, 101 N.J. at 400-01. Accordingly, our determination of the necessary sanction in disciplinary matters is "necessarily fact-sensitive." Id. at 400. We view respondent's misconduct in this case as most serious, as falling below not only the standards required of attorneys in their private commercial dealings but below general marketplace norms of fair dealing as well. Consumed with the prospect of owning HLW, respondent subverted basic tenets of honesty to his own personal and selfish interests. This dishonesty, coupled with respondent's breach of his obligation to warn Ferber of the need for independent counsel at the outset, resulted in a substantial loss to the Ferbers' estates. Respondent's knowingly false testimony, albeit given in the capacity of a litigant, nonetheless "is a fundamental breach of a lawyer's duty as an officer of the court * * * [striking at] the heart of every attorney's obligation to uphold and honor the law." In re Kushner, supra, 101 N.J. at 401 (quoting In re Schleimer, supra, 78 N.J. at 319 (1978)). Several factors, however, counsel that we stay our hand short of disbarment. Unlike the continuing or multiple instances of fraud and deceit that warranted disbarment in In re Smyzer, supra, 108 N.J. 47, In re Servance, supra, 102 N.J. 286 and In re Bricker, 90 N.J. 6 (1982), respondent's fraudulent conduct was limited to a single transaction; apart from these events his record as an attorney is unblemished. See, e.g., In re Kushner, supra, 101 N.J. at 400 (evidence of "prior trust-worthy professional conduct" may mitigate damage to integrity of bar); see also In re Schleimer, supra, 78 N.J. at 319 (noting relevance of substantially unblemished previous record); In re Hurd, supra, 69 N.J. at 330 (same). Further, rather than counselling a client to invest in a losing commercial proposition in an attempt to protect the attorney's own interests, conduct we deem just short of misappropriation, e.g., In re Smyzer, supra, 108 N.J. at 57 (disbarred); In re Wolk, supra, 82 N.J. at 335 (same), respondent harbored a genuine belief that the *226 venture would reap substantial rewards for both him and Ferber; indeed his inflated evaluation of HLW led him to burden the company's prospective cash flow beyond repair.[11] In sum, we are not inclined to view this as a case of an attorney "hoodwinking * * * clients out of funds in a business venture that is essentially for the benefit of the lawyer." Ibid. Our focus on the protection of the public and the preservation of its confidence in the bar renders significant the attenuated nature of the relationship between respondent's misconduct and the practice of law. See In re Stier, supra, 108 N.J. at 456-57 (where attorney filed false documents with registrar of deeds on behalf of clients court noted that infractions "arose from the lawyer-client relationship and were directly related to the practice of law"); In re Pleva, supra, 106 N.J. at 647 (where attorney was convicted of drug possession and falsification of firearm purchase application court noted that "misconduct was not directly related to the practice of law"). Although Ferber and respondent related generally as attorney and client, and respondent failed in his responsibilities owed to Ferber as a client, supra at 213-217 (discussing DR 5-104(A), none of the misconduct arose out of practice-related powers or tasks. Compare In re Wilson, supra, 81 N.J. 451 (misappropriation of client trust funds). In this regard it is also significant to note that Ferber, who was not unconversant in dealing with attorneys, apparently voiced no complaints whatsoever concerning respondent's professional conduct before his death, eighteen months after the HLW closing. Finally, the passage of time that has occurred since the relevant conduct mitigates the severity of the requisite discipline *227 in two respects. The most significant events at issue in this case occurred in the Winter and Spring of 1979, over nine years ago. Only last term in In re Kotok, supra, where nearly ten years separated the ethical infractions and finalization of discipline before this Court, we expressed that in such situations Accord In re Stier, 108 N.J. at 460 (following Kotok); In re DiBiasi, 102 N.J. 152, 155 (1986) (eight years between crime and final discipline is mitigating factor); In re Verdiramo, 96 N.J. 183, 187 (1984) (where ethical infractions are eight years old "the public interest in proper and prompt discipline is necessarily and irretrievably diluted by the passage of time"). Furthermore, as noted, respondent has been suspended from practice in this state for over six years. Such a suspension "is unusual and, because of its severity, has been compared to disbarment." In re Templeton, 99 N.J. 365, 376 (1985); see In re Verdiramo, supra, 96 N.J. at 187. In the interim respondent has seemingly made gains towards rehabilitation. He has continued to practice before the Patent and Trademark office without incident, and has passed the ethics portion of the Florida State Bar examination. Further, respondent cooperated fully in these proceedings and has largely acknowledged the seriousness of his transgressions.[12] In such circumstances, the rehabilitation facet of the disciplinary process "has in some measure been accomplished through the passage of time." *228 Disbarment or a further term of suspension may be unnecessary or even "counter productive," In re Kotok, supra, 108 N.J. at 331, and would likely smack of vindictiveness rather than justice. In re Verdiramo, supra, 96 N.J. at 187. These related factors, and reference to our prior cases involving fraudulent conduct and false swearing, suggest that retroactive discipline is an appropriate choice of punishment in this case. See In re Simeone, 108 N.J. 515, 522-23 (1987) (serious and numerous infractions falling just short of knowing misappropriation; retroactive six year suspension); In re Kotok, supra, 108 N.J. at 330 (discussing propriety of retroactive discipline); In re Pauk, 107 N.J. 295, 302-06 (1987) (four-year retroactive suspension was sufficient discipline for five year span of ethical transgressions involving "a pervasive pattern of neglect, misrepresentation, and overreaching"); In re Noonan, 102 N.J. at 165 (retroactive five-year suspension ordered for respondent guilty of nine instances of misconduct involving neglect of legal matters, failure to properly maintain books and records, and conduct adversely reflecting on fitness to practice); In re Kushner, supra, 101 N.J. at 402-403 (three-year retroactive suspension ordered for respondent convicted of false swearing as a civil litigant); In re Schleimer, supra, 78 N.J. at 319 (respondent convicted of false swearing as civil litigant given one-year suspension). We acknowledge that respondent's inexcusable lack of candor during the civil trial came three years after the primary misconduct at issue, and thus to some extent negates the suggestion that the latter was aberrational. Nevertheless, based on our thorough scrutiny of the entire record, we are not convinced that the ethical violations in this case are of such a magnitude as to establish that respondent's professional career must be terminated. Hence we decline to accept the recommendation of disbarment, and order instead that the six-plus years respondent has been suspended from practice in this State constitutes an appropriate discipline. Respondent is directed to reimburse the Ethics Financial Committee for appropriate administrative costs. *229 For Suspension Chief Justice WILENTZ and Justices CLIFFORD, HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN join 7. Opposed None. This matter having been duly considered by the Court, it is ORDERED that the suspension of MELVIN SILVERMAN, formerly of CLIFTON, who was admitted to the bar of this State in 1970, from the practice of law by Order of the Supreme Court dated June 24, 1982, be deemed appropriate discipline for his violations of DR 1-102(A)(3), DR 1-102(A)(4), and DR 5-104(A); and it is further ORDERED that respondent may seek to be restored to the practice of law pursuant to Rule 1:20-11(h); and it is further ORDERED that MELVIN SILVERMAN reimburse the Ethics Financial Committee for appropriate administrative costs incurred in the prosecution of these proceedings. [1] Although the Board found that $145,000 of the judgment was satisfied by other defendants, the record is unclear on whether this $145,000 payment to the Ferbers' estates represented independent damages or was credited to Silverman's liabilities. [2] In the interim respondent has also taken and passed the Florida State Bar examination, including the required multi-state professional responsibility exam. Respondent stated that he awaits final judgment in this matter before applying for admission to the Florida bar. [3] The Committee properly looked to the former Disciplinary Rules, since the relevant events occurred prior to the effective date of the new Rules of Professional Conduct, September 10, 1984. [4] As discussed infra at 222-224, the Board's characterizations of respondents' testimony in the civil proceeding and in the Committee hearing regarding the alteration of the Kaufman statement are incorrect. The record in the civil proceeding reveals that at one point respondent acknowledged changes in the Kaufman statement. Moreover, before the Committee respondent's testimony was that the statement in the stipulation concerning his testimony "would have to be somewhat changed in its shading," and not, as the Board asserted, the civil testimony itself. [5] "A lawyer shall not * * * [e]ngage in conduct involving dishonesty, fraud, deceit, or misrepresentation." Rule 8.4(c) of the Rules of Professional Conduct is nearly identical. [6] "A lawyer shall not * * * [e]ngage in illegal conduct that adversely reflects on his fitness to practice law." Rule 8.4(b) of the Rules of Professional Conduct proscribes the commission of criminal acts that reflect adversely on a lawyer's "honesty, trustworthiness or fitness as a lawyer in other respects." [7] Rule 1.8(a) now governs this particular area of professional responsibility, in a somewhat stricter manner: A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless (1) the transaction and terms in which the lawyer acquired the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in manner and terms that should have reasonably been understood by the client, (2) the client is advised of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent counsel of the client's choice on the transaction, and (3) the client consents in writing thereto. [8] For example, respondent failed adequately to disclose the following details to either Robertson or Ferber: (1) Various finders fees to be paid out of the HLW cash flow, (2) the necessity to secure the Weir loan with second and third mortgages on various Ferber properties, and (3) arrangements with the Weir Group involving substantial payments in lieu of a promised 15% interest in HLW. Respondent's contention that these omissions were harmless because there was no equity in the land left to mortgage, and because the promised payments were subordinated to Ferber's security in the HLW cash flow are wholly unpersuasive. See infra at 216. [9] This Rule is now covered by RPC 1.7(b). [10] Had respondent undertaken affirmatively to represent Ferber in the transaction itself, the effect on his professional judgment would be clear. See supra at 214. [11] Respondent's thinking in this regard is exemplified by the Board's revelation that in addition to the 25% interest the Weir Group was to receive on its $100,00 loan, respondent agreed at the closing "to pay the Weir Group $200,000 annually from HLW profits if the proposed [15%] partnership were not formed within four years * * * [and] to provide a principal of Weir with a 4-year `consulting contract' worth $227,500, the proceeds of which were to inure to the benefit of the Weir Group." Supra at 204. [12] For example, with reference to DR 5-104(A) respondent testified that "I realize I made a grave mistake in my judgment, that Robertson should have been informed to the umpteenth degree. I should have refused to even meet with Ferber on anything but a social basis." Respondent acknowledged that much of what he did was absolutely wrong, and expressed that he had no desire to ever again attempt a role in a complex business transaction.