A few years later, his wife seeks a divorce and attends the same law firm but a different lawyer. In ordinary circumstances, the entire firm should disqualify itself and decline to act for the wife given the perception of conflict of interest and a presumption of shared confidences between lawyers of a same firm. To get round this, but playing with fire as professional disciplinary bodies are inconstent as to the approval of Chinese Walls, law firms create and implement them anyway hoping to thus shield themselves from, or rebut the presumption of having acted in a conflict of interest, and for which they would be exposed to professional discipline.
As Justice Sopinka mentioned in MacDonald Estate , a Chinese Wall is often coupled with the less-effective technique of a cone of silence. In Cobb Publishing v. Hearst Corporation , F. Is also in use in criminal law to refer to a form of a gag order defence attorneys put on their client and the evidence while the prosecution is investigating or building their case.
Chinese wall - Idioms by The Free Dictionary
Persons who are above the wall may have access to material non-public information on both sides of the information barriers. Chinese Walls are an important part of investment banking best practices and compliance. Thank you for reading this guide to an important virtual information barrier known as a Chinese Wall. To keep learning and advancing your career, CFI has created many resources to help you on your way:.
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Learn financial modeling and valuation in Excel the easy way , with step-by-step training. Chinese Wall What a Chinese Wall is, why investment banks use in them, and how they work.
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What is a Chinese Wall? Material Non-Public Information Investment bankers in possession of material, non-public information concerning a publicly-traded company are strictly prohibited from discussing any such information with individuals who do not have a need to know such information for the purpose of servicing the client that provided the information to the bank.
Bringing Employees Over the Chinese Wall Under some circumstances, investment bankers may be permitted to disclose material, nonpublic information to employees in the Credit Capital Markets, Commercial Banking , Equity Research and Risk Management departments for valid business purposes in connection with a particular investment banking transaction.