1441 (S.D.N.Y. 1987) is inapposite. See Teamsters, 119 F.3d at
215-16 (rejecting "reasonable belief" standard for finding
personal attorney-client privilege between corporate counsel and
Sorkin's Authority to Make The Statements on December 2 and 3
On December 2, 1999, Sorkin made certain statements to SEC
staff on behalf of Blech in which Sorkin corrected prior
representations as to whether securities had been margined by
On December 3, 1999, in a proceeding before this Court, Sorkin
again made statements directed at correcting prior
representations regarding the margining of securities by Credit
Bancorp. Sorkin represented to the Court on December 3 that Blech
had authorized him to make these statements to it as well as to
the SEC and the Receiver. Subsequently, in a Declaration dated
March 15, 2000, Blech denied that he had authorized Sorkin to
make these statements.
At the May 16 hearing, Sorkin testified that Blech authorized
him to make the statements at issue to the SEC on December 2 and
the Court on December 3. Tr. at 18, 25-26. The Court finds
Sorkin's testimony to be credible, and that in fact Sorkin was so
Blech contends that even if Sorkin's testimony is found
credible that this Court cannot find that he authorized the
statements on December 2 and 3.
Blech avers that Sorkin could not have knowingly and
intelligently authorized Sorkin to make incriminating admissions
on Blech's behalf due to a conflict of interest arising from
Sorkin's simultaneous defense of Blech and defendant Thomas
Rittweger ("Rittweger"). The authority cited by Blech, United
States v. Blau, 159 F.3d 68 (2d Cir. 1998), concerns a different
issue, namely, when a criminal defendant's right to effective
assistance of counsel under the Sixth Amendment is violated due
to a conflict of interest. Blech's Sixth Amendment rights were
not implicated in December, 1999. See, e.g., McNeil v.
Wisconsin, 501 U.S. 171, 175, 111 S.Ct. 2204, 115 L.Ed.2d 158
(1991) (Sixth Amendment right to counsel does not attach until
"at or after the initiation of adversary judicial criminal
proceedings — whether by way of formal charge, preliminary
hearing, indictment, information, or arraignment").
Moreover, even under the Blau standard, Blech must show
either that Sorkin had "`(1) a potential conflict of interest
that resulted in prejudice . . . or (2) an actual conflict of
interest that adversely affected the attorney's performance.'"
Blau, 159 F.3d at 74 (citation omitted). Sorkin testified that
he believed, and so advised Blech, that it was in Blech's best
interest to cooperate with the government. Tr. at 24, 29-30.
There is no evidence that Sorkin's advice to Blech was tainted by
a conflict of interest with respect to Sorkin's representation of
Rittweger. That Sorkin was also aware that the statements he made
on December 3, 1999 were incriminating, would be part of the
public record, would be binding, and would be available for use
against Blech in a criminal investigation, shows only that Sorkin
was aware that there were consequences to such statements —
consequences of which he advised Blech. Tr. at 29-30. Sorkin's
awareness of these consequences does not obviate his testimony
that he acted on the premise that Blech's best option was to
cooperate. Tr. at 24, 29-30. Thus, Blech has not demonstrated
that he suffered prejudice due to a conflict of interest on the
part of Sorkin, and cannot claim based on such a conflict that he
did not knowingly and intelligently authorize Sorkin to make the
statements at issue.
Blech further contends that, even if Sorkin was authorized to
make certain admissions to the SEC and the United States
Attorney, Sorkin exceeded the scope of his authorization when he
made these same statements in open court on December 3, 1999.
Blech characterizes Sorkin as having testified that his authority
to make the statements in open court was derived from Blech's
presence while Sorkin made similar statements to the SEC and the
States Attorney's Office and any authorization to make such
non-public statements. This characterization, however, is
inaccurate. Sorkin testified specifically that he explained to
Blech the need to correct misrepresentations made to the Court on
November 17 and 24, 1999 regarding whether securities had been
margined by Credit Bancorp, and that Blech authorized him to do
so. Tr. at 25-26. Sorkin then appeared before the Court on
December 3 and made the authorized statements. Nor does Sorkin's
testimony that his corrections of prior misrepresentations were
"within the constraints of the attorney-client privilege,"
obviate his authorization to make these specific statements. Tr.
Finally, Blech's reliance on Rule 11 to show that Sorkin's
statements before this Court were outside the scope of his
authority is unavailing. This is not a case where statements were
made to the United States Attorney as part of plea discussions
and then improperly admitted in this civil proceeding on December
3. See Fed. R.Crim. Proc. 11(e)(6). Rather, the Court finds
that Blech independently authorized Sorkin to make the statements
to both the Court and the SEC. Indeed, the meeting with the
United States Attorney occurred on December 15, that is, after
the proceeding on December 3. If anything, the meeting with the
United States Attorney indicates an ongoing plan of cooperation
which included the events of December 2 and 3 and further
supports Sorkin's testimony that he had authorization on those
Therefore, the Court finds that Lynch did not represent Blech
in his personal capacity, and concludes that there is no personal
attorney-client privilege as between Lynch and Blech. The Court
further finds that Sorkin's statements on Blech's behalf to the
SEC on December 2, 1999, and to this Court on December 3, 1999,
were authorized by Blech.
It is so ordered.