LIABILITY OF COUNSEL FOR ISSUER

You know, as Neil said, I worked in the government for the first years of my life and when I came out to practice law about twenty years ago or more with two other fellows, I talked to the senior one and I said, What is this law practice about? And Thurman Arnold who was referred to by Professor Loss, said to me, is very simple. The law must be practiced in an ethical manner and for this purpose there have been rules of legal ethics prescribed. And the first rule of legal ethics which you must always observe is that if you get into a difficult situation and it looks like somebody has to go to jail or to pay a big judgment, you must be sure that it is the client and not the lawyer that does it. Now, it is my happy duty to inform the assembled multitudes that in my judgment Judge McLean's opinion in the BarChris case does not, in any way, contravene that first rule of legal ethics. That opinion says, I think very clearly, not expressly but by implication, that a lawyer as a lawyer has no liability under the Securities Act to the purchasers of the security. Of course, two lawyers were sued and it was held by him that they were liable but it has not escaped notice that those two lawyers were directors of the corporation. They were members of law firms, one in New York and one in Philadelphia. Those law firms were not sued and I assume since everybody else was sued, they were not sued because it was the judgment of the plaintiffs as well as my own that the law firms were not responsible for failure to make an adequate investigation. Now, why is this? It is because the statute specifically provided who should be liable. The statute is a departure from the normal rules of law. In the normal case it would only be the issuer which sold the securities which would be liable. The Securities Act pursuant to a great public policy has said: We would like to impose responsibility upon somebody else besides the selling company. We will impose the liability upon a larger group of persons for the purpose of seeing to it that the public is protected by a reasonable investigation by responsible persons. Those persons are listed. They are the officers, the directors, the signers of the registration statement, the experts. It was the Congress' decision that they should be responsible.