Michael McNerney*, formerly a name partner at one of Fort Lauderdale most prominent law firms, but now awaiting sentencing for his role in the billion dollar Mutual Benefits Ponzi scheme, was seeking a judicial determination that he was not guilty of concealing material facts from investors. His counsel filed a Motion to Strike Allegations of Concealment in the Indictment, arguing that he did not make any misstatements of material fact.
The Court, speaking through District Judge Adalberto Jordan, denied his motion, citing to a decision that held "the duty to disclose is a general one, and arises whenever a disclosed statement would be misleading, in the absence of the disclosure of additional material facts needed to make it not misleading." In other words, if you remain silent when you should speak up, to correct a misleading statement or impression, you are still concealing information. Remember that the next time you are at an important meeting, and something is said that needs correction, or clarification, and you fail to say anything; it could come back to bite you.
What about Mr. McNerney ? Why was he so intent on minimising his role in the fraud ? He may have his eye on returning to the practice of law eventually, and he might have sought to strike the concealment allegations so as to increase his chances of readmission. However, he did sit in on meetings with investors, and the presence of the firm's attorney, in the face of misleading statements made by sales staff, was certainly reassuring to the investors.
By the way, the judge sentenced him to five years in Federal Prison, (the maximum sentence for Conspiracy to commit Mail & Wire Fraud) to be followed by three years of Supervised Release, a form of parole, and ordered him to make restitution in the amount of $826m. He is due to self-surrender on 26 October.
He will most likely be called upon to testify against his principal client, and the attorney-client privilege has an important exception; if you are engaged in a crime or fraud with your client, the privilege no longer attaches.
* United States vs. McNerney, Case No.: 1:08-cr-21158-AJ (SD FLA).