Also known as: fraudulent acts
Written by attorneys · grounded in primary & secondary sources — see below
An act by a client that is criminal or involves dishonesty, which a lawyer must not assist by failing to disclose a material fact unless disclosure is prohibited by confidentiality rules.
Felipe Figueroa, outside counsel to a medical device maker, learns that executives plan to ship a batch despite internal tests showing possible contamination. When a hospital buyer asks for written assurance that all recent lots met safety specs, Felipe must decide whether silence would let the client mislead the buyer about product quality. The facts show the test results create a material uncertainty that the client intends to omit from its response.
Faye Fuller, an employee at a printing firm, learns of a pending takeover while setting type for merger documents. She buys target shares without telling the seller of her knowledge. The purchase allows her to profit from information the seller would have viewed as decisive in setting the price.
Select any source to read its text and confirm it supports the definition.
Fiona Foster, a local election official, alters ballot tallies in several precincts to favor one candidate. The changes reduce the effective weight of votes cast by residents in opposing districts. The scheme assists the candidate's effort to obtain office through dishonest means.
Forrest Falconer, a geologist at a mining firm, learns of a major ore discovery. Executives issue a press release that downplays the find while insiders buy shares. Investors later claim the release was part of a fraudulent act that distorted market prices.
Farah Fox, a general partner in a real estate venture, receives earnest money deposits from a prospective tenant into the partnership account. She uses the funds to pay taxes on her personal property instead. The tenant sues the partnership for the loss caused by the diversion.
Fernando Farrell, outside counsel to a public company, learns nonpublic details about an upcoming acquisition while preparing disclosure filings. He buys shares in the target before the deal is announced. Regulators later investigate whether the trades were part of a fraudulent act that breached duties to the client and the market.
A lawyer must disclose a material fact to a third person if nondisclosure would assist the client in a criminal or fraudulent act, unless Rule 1.6 prohibits the disclosure. The duty arises when the lawyer knows the omitted fact is material and that silence would enable the client's misconduct. Materiality turns on whether a reasonable person would attach importance to the fact in making a decision.
Supporting sources
Inconclusive data alone does not automatically require disclosure if the client holds a good-faith belief that no defect exists and the facts do not clearly show assistance of fraud. The rule focuses on whether nondisclosure would assist a fraudulent act, not on every internal uncertainty. When the client reasonably views the results as inconclusive, confidentiality protections under Rule 1.6 typically prevail.
Supporting sources
A fact is material when a reasonable person in the recipient's position would attach importance to it in deciding a course of conduct. Direct inquiries from third parties about the very subject matter increase the likelihood that the information qualifies as material. The rule does not require proof that the underlying conduct is actually fraudulent, only that withholding the fact would assist such conduct.
Supporting sources
…or struck down. Nixon v. Herndon , 273 U. S. 536; Smith v. Allwright , 321 U. S. 649; Terry v. Adams , 345 U. S. 461. Fraudulent acts that dilute the votes of some have long been held to be within judicial cognizance. Ex parte Siebold , 100 U. S. 371. The "right to have one's vote counted" whatever his race or…