Also known as: full disclosures · fully disclose · fully discloses · fully disclosed · fully disclosing
Written by attorneys · grounded in primary & secondary sources — see below
A complete revelation of all material facts. The revelation enables informed consent to a transaction or ratification of conduct that would otherwise breach a fiduciary duty.
Farah Fox retained Frederick Ferguson to handle her corporate matters. Ferguson proposed buying twenty percent of Fox's company at a below-market price. Ferguson sent Fox a letter describing the price, his conflicting role, and the need for independent counsel. Fox signed the letter after reviewing it. The purchase later closed without challenge because the terms and Ferguson's role had been fully disclosed in writing.
Flora Ford and Fatou Fall formed a two-member partnership to develop software. Ford secretly licensed partnership code to a third party. At a meeting Ford described the license terms, the fees received, and her personal interest. Fall then signed a written consent approving the transaction. The consent barred any later claim that Ford breached her duty of loyalty.
Select any source to read its text and confirm it supports the definition.
Francesca Fowler formed Ferrum Metals and sold her own equipment to the new corporation at a markup. Fowler disclosed the markup and her ownership interest only to the first two subscribers. When the remaining contemplated investors later learned of the profit they sued. The corporation recovered the secret profit because disclosure had not reached every person contemplated as part of the original financing plan.
Flagship Logistics directed its in-house lawyers to interview employees about possible regulatory violations. The lawyers received every internal report and email the employees possessed. Because the employees made full disclosure of all facts within their knowledge the company could later assert attorney-client privilege over the resulting memoranda.
Fairfield Bank proposed a merger that would eliminate minority shares at a stated price. The proxy statement listed every financial projection and conflict the board had considered. Minority shareholders who received the full set of facts could not later claim the merger was manipulative under the securities laws.
Fulton Shipping and another carrier discussed a possible merger. While talks continued the target received an improved offer from a third party. The target disclosed the new offer to investors before any public announcement of the original talks. Because the market received complete information the original statements remained non-misleading.
The lawyer must transmit in writing the transaction terms and the lawyer's role in a manner the client can reasonably understand. The writing must also advise the client of the desirability of independent counsel and give the client a reasonable opportunity to obtain that advice.
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All partners may authorize or ratify the transaction after receiving full disclosure of every material fact. Partial or oral summaries that omit key terms or conflicts do not satisfy the requirement.
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Yes. Disclosure only to some subscribers is insufficient. Ratification requires full disclosure to and approval by all persons contemplated as part of the original financing scheme who later become shareholders.
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Yes. The privilege rests on the client's ability to provide complete information to counsel without fear of disclosure. When clients reveal all facts within their knowledge the resulting communications remain protected.
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…2d Sess., 11 (1934). This Court "repeatedly has described the fundamental purpose' of the Act as implementing a philosophy of full disclosure.' " Santa Fe Industries, Inc. v. Green, 430 U. S. 462, 477-478 (1977), quoting SEC v. Capital Gains Research Bureau, Inc., 375 U. S. 180, 186 (1963). Pursuant to its authority under §…