Opinion ID: 1283206
Heading Depth: 1
Heading Rank: 6

Heading: summary and analysis of the board's evidence

Text: As discussed earlier, the evidence illustrates the manner in which Mailath conducted himself toward only two of several individuals with whom he dealt. The record is replete with instances where the bar applicant actively placed his personal interest above that of the partnerships. He maintained virtually absolute control over them, and his partners were kept uninformed about financial disasters he knew to be imminent. Mailath led individuals, particularly his accounting clients, to believe not only that he had a pecuniary stake in each enterprise, but also that they would ultimately profit from their contributions. The evidence strongly indicates that the bar applicant realized profits were not likely. On occasion he succeeded in hastily clothing his clients with partner status  under the guise of offering them tax-saving investment opportunities  just a few days before promissory notes were due. Financial institutions would usually renew partnership obligations and advance additional funds in reliance upon the cash contributions from the new partners as well as upon the strength of the personal assets they implicitly offered as security. Mailath concealed facts that would likely have deterred his clients from becoming partners. He never fully explained to them the ramifications of partner status, even though he knew they were ignorant of the vital facts regarding potential liability. Equally damaging to the bar applicant  in our evaluation of his ethical character  is the persuasive evidence that he frequently misrepresented to prospective and current partners the true state of partnership affairs. For as long as an enterprise continues, its partners owe each other the utmost duty of good faith and loyalty. [14] Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. [15] The evidence shows clearly that Mailath, in his capacity as partner, breached his fiduciary duties. He took advantage of his position and disadvantaged his partners by secretly negotiating and receiving funds (finder's fees) for his own personal gain. He kept virtually all of his partners ignorant of the serious financial troubles that plagued many of the partnerships. [16] Notwithstanding the fact that most partners never even read the partnership agreements and promissory notes Mailath had them sign, the bar applicant was in no position to treat and deal with them as though they stood at arm's length. [17] He was [a] trustee ... held to something stricter than the morals of the market place. [18] He led them to believe that he had as much money at stake as they did, when in fact he placed no funds of his own at risk. Playing upon their ignorance and in breach of his duties as a fiduciary, he made his clients partners, free of charge, for the primary purpose of shifting liability away from himself and onto their trusting shoulders. Throughout the relationship he collected cash for his services while recklessly leading others to financial ruin. A state may require a bar applicant to demonstrate those qualifications which are reasonably related to fitness for the practice of law. [19] Considering the bar applicant's conduct as partner, we must find his ethical value system extremely questionable at the very least. The degree of loyalty required of a lawyer to his client is even greater than that owed among partners; both personal as well as professional ethics are imperative for bar admission. [20] Evaluating the evidence in light of all the roles in which Mailath acted leaves no doubt that he lacks the requisite ethical qualifications for bar admission. Mailath was the personal accountant of at least five individuals who eventually became his partners. He acquired their profound confidence and absolute trust as a result of that pre-existing professional fiduciary relationship. His clients, especially those who had no business or investment experience, were completely dependent upon his advice. He assumed  vis-a-vis those clients  the role of accountant, financial advisor, promoter, broker, and, to a limited extent, lawyer, [21] while ignoring completely the highly obtrusive conflicts of interest. The bar applicant knew some of his clients naively equated his experience as a law-school graduate with that of a seasoned licensed legal practitioner. It is also apparent from the record they relied on his professional judgment with the same degree of trust and confidence as that which one would normally place in a lawyer. Mailath's blatant insouciance toward basic tenets of personal ethics makes him a hazard to the public and hence unfit for admission to the bar. [22]