Fascinating stuff going on inside Tesla's in-house counsel office right now.
I know I have some journalists on the $TSLA beat following me right now (@CGrantWSJ, @lisahopeking, @danahull), so let's talk the fascinating professional responsibility issues at hand
$TSLAQ
I know I have some journalists on the $TSLA beat following me right now (@CGrantWSJ, @lisahopeking, @danahull), so let's talk the fascinating professional responsibility issues at hand
$TSLAQ
First, pretty sure all these lawyers are practicing in California, so they are governed by the California Rules of Professional Conduct
The rule relevant to this discussion is 3-600 - Organization as Client
calbar.ca.gov/Attorneys/Cond…
The rule relevant to this discussion is 3-600 - Organization as Client
calbar.ca.gov/Attorneys/Cond…
First key point - for $TSLA's in-house counsel, the corporation is the client - not @elonmusk, not individual board members, not the board acting as a whole. 
Second key point - if an agent of the corporation (i.e. @elonmusk) is violating the law/hurting the corporation, they are NOT allowed to disclose confidential information, but rather have to escalate things as high as possible (in this case the board)
Third key point - if there is even potential adverseness between @elonmusk and Tesla - they don't represent Elon, they represent the corporation, and have to inform Elon that they are acting in that capacity
Finally - if the highest authority does not act on their advice, they are still not allowed to disclose confidential information - they can only resign
So - first, it looks like @CGasparino's source may have violated professional ethics by disclosing Tesla's internal assessment of its potential liability in the civil suits
Second, query what would lead Tesla's in-house counsel to leak information like this
The first action should have been to get the board involved
But what if the board isn't acting?
My guess is that Tesla's in-house counsel are LIVID right now
The first action should have been to get the board involved
But what if the board isn't acting?
My guess is that Tesla's in-house counsel are LIVID right now
Third, realize what a mess the organization is in right now
In-house counsel normally reports to the CEO
But the CEO's interests are probably now adverse to the corporation's (add in the going-private discussions here as well)
In-house counsel normally reports to the CEO
But the CEO's interests are probably now adverse to the corporation's (add in the going-private discussions here as well)
Anyway, if I were a journalist, I'd be talking to people or Donald Langevoort about this, or some lawyers with expertise in professional ethics and getting their take
law.georgetown.edu/faculty/donald…
FIN
law.georgetown.edu/faculty/donald…
FIN
