• The noisy withdrawal provision raises serious constitutional issues as applied to defense counsel. Clients have a constitutional right to be represented by counsel in litigation. Any SEC rule that denies that right, especially one that denies that right without advancing a legitimate interest, is constitutionally suspect as a violation of the due process clause of the Fifth Amendment. The constitutional issues are especially severe with respect to the work of defense attorneys in matters that are of a criminal nature or that, like SEC investigations, are reasonably likely to result in criminal referrals. With respect to these matters, the SEC rules would deny clients the right to counsel in criminal matters, a right recognized by the Sixth Amendment and repeatedly affirmed by the courts.
• In representing issues in government investigations and litigation, attorneys act as advocates. While the attorneys have an obligation to inform clients regarding the status of the investigation or litigation so that they can make informed decisions, the attorneys are not responsible for the quality of a company’s disclosures. The ability of counsel effectively to represent issuers will be chilled if they are made responsible for the accuracy of the issuer’s disclosures.
• In SEC investigations and enforcement actions, attorneys often represent issuers that have made financial disclosures that are challenged as being materially misleading. That issuers are entitled to zealous representation by attorneys of their choice is recognized throughout state and federal cases and is specifically recognized in the Administrative Procedures Act and the Commission’s own Rules of Practice. Under the proposed rule, an issuer may not be able to retain counsel to defend its position unless it can locate an attorney who is willing to stake his or her career on the risk that a trier of fact will not later conclude that the attorney was aware of "evidence of a material violation."
• In every investigation of financial fraud and disclosure, an attorney representing the issuer will need to consider the threat of possible charges against the attorney for having represented the position of the issuer without engaging in a noisy withdrawal.
• There is no need to extend this requirement to SEC investigations and enforcement actions. By definition, if defense counsel is representing an issuer in an SEC investigation or enforcement action, the SEC Enforcement Staff is already involved.
• As mentioned above, we think counsel conducting an internal investigation, and not otherwise interacting with the Commission, should not be considered to be appearing or practicing before the Commission. To impose a noisy withdrawal obligation on investigative counsel could potentially mean that counsel’s first and only identified appearance before the Commission will be the noisy withdrawal.
• Congress gave no indication that it intended to revolutionize the practice of defense counsel representing issuers in SEC investigations and enforcement actions. To the contrary, the sponsors of the amendment that became Section 302 of Sarbanes-Oxley repeatedly stated that the amendment "basically instructs the SEC to start doing exactly what they were doing 20 years ago, to start enforcing this up-the-ladder principle." Remarks of Senator. J. Edwards, S6552.
  
  

• The "reasonably believes" standard is too low for such an act as consequential as disaffirmation, and should, in any event, be consistent with standards currently governing attorneys in parallel criminal actions. We urge the Commission to adopt the standard, here as elsewhere in these rules, that the attorney be "reasonably certain" that material violations are occurring or will occur.
• The disaffirmation requirement should be limited to registration statements and periodic reports that the attorney is reasonably certain are materially false and misleading, and which are currently of importance to investors. We do not believe that it is appropriate to require an attorney to disaffirm a disclosure or document where there is a substantial likelihood that the disclosure or report is not materially false and misleading.
• We believe that the disaffirmation requirement should be limited to instances where the issuer had engaged or assigned the attorney to prepare the disclosure or disclosures that the attorney is reasonably certain are materially false and misleading.
• If the attorney is required to disaffirm, the attorney should not be required to disaffirm specific disclosures in the document. The risk that a disaffirmation will be found to have waived the client’s attorney-client privilege is significantly increased if the disaffirmation specifies a specific disclosure. In addition, it may be difficult to identify all of the specific disclosures implicated by the issue. Furthermore, general disaffirmation of a document will provide sufficient notice to the Commission to permit the Commission to initiate any investigation it deems appropriate.

Part 205.3(d)(i)(c) and Part 205.3(d)(ii) requires, under certain circumstances, that an attorney disaffirm anything that the "attorney reasonably believes is or may be false or misleading." The "may be" component of this provision requires clarification. It will be relatively rare that an attorney will have sufficient information to preclude the possibility that a document contains representations that are materially false and misleading. If an attorney is required to disaffirm each document that contains a representation that the attorney prepared or assisted in preparing and that a reasonable attorney would conclude "may be" materially false and misleading, the attorney would likely disaffirm every document filed with or submitted to the Commission that the attorney has prepared or assisted in preparing and that contains representations. This step would not be in the public interest.