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Ethics
More than 1,700 California lawyers suspended for failure to comply with new trust account rules
The State Bar of California adopted the Client Trust Account Protection Program after attorney Tom Girardi was accused of stealing more than $18 million from clients. Image from Shutterstock.
More than 1,700 California lawyers have failed to comply with new trust account rules, leading to their administrative suspensions.
About 2,000 California lawyers were initially placed on involuntary inactive status for failing to comply, but the number out of compliance had dropped to more than 1,700 as of July 25, Law 360 reports.
The Los Angeles Times reports, however, that more than 1,700 were initially placed on inactive status, and the number had dropped to 1,641 as of July 28.
The State Bar of California adopted the Client Trust Account Protection Program after attorney Tom Girardi was accused of stealing more than $18 million from clients. The bar had opened 205 disciplinary matters over four decades against Girardi, with only three leading to disbarment. A review later concluded that some complaints were likely closed improperly.
The new program requires lawyers to report whether they are responsible for client trust accounts, to provide basic account information, to complete an annual self-assessment, and to certify that they comply with ethics rules related to safeguarding client funds, according to a October 2022 press release.
The deadline for compliance was April 3. Those who didn’t comply were fined $75 and informed that they had until June 30 to come into compliance, according to the Los Angeles Times. The administrative suspensions began in July.
The new rules are intended to help the state bar prevent attorney theft. Steven Moawad, the special counsel overseeing the trust account program, told the Los Angeles Times that the suspensions are for nonreporting. But some lawyer may have declined to report “because they were stealing money from their trust accounts and they didn’t want to be found out,” he said.
There may also be some instances in which a licensed lawyer has died, but no one notified the state bar, Moawad said.
“There could be any number of reasons” for not reporting, Moawad told the Los Angeles Times.
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