Question

After Bank Corp's stock plummets, it anticipates a securities fraud lawsuit from shareholders

who lost a great deal of money. While preparing for the lawsuit, an employee at Bank Corp
reviews a number of corporate records and drafts a comprehensive memo summarizing the
records and evaluating the corporation's compliance with federal securities law. If the plaintiff
drafts a discovery request that would include both the records and the memo, what must Bank
Corp produce?
a-A privilege log, but not the memo or the records
b- Only the records
c- Only the memo
d-The records and the memo

Answer 1

In a securities fraud lawsuit, Bank Corp must produce the corporate records requested for discovery but may withhold the memo summarizing the records and evaluating compliance by providing a privilege log. This is due to the potential application of attorney-client privilege or work product doctrine to the memo.

Step-by-step explanation:

In a securities fraud lawsuit, Bank Corp may be required to produce corporate records for discovery. However, the comprehensive memo drafted by an employee that evaluates the corporation's compliance might be protected by attorney-client privilege or work product doctrine. This privilege is usually invoked when the communication is made for the purpose of seeking or providing legal advice. Since the memo likely contains legal evaluations, it may not have to be produced unless the privilege is waived or an exception applies. On the other hand, corporate records are typically not privileged and would be subject to discovery. Hence, Bank Corp must produce the records but may be able to withhold the memo, providing a privilege log to explain the withholding.

• The records must be produced as they are factual accounts.
• The memo may be protected under attorney-client privilege or work product doctrine.
• A privilege log must be provided to justify withholding the memo.