Q: Dear Ethics Lawyer, A well-meaning but less competent friend of mine discovered that he has blown a statute of limitations for a client who happens to be his good friend. He feels terrible about this, and wants to make it right. Fortunately, he and his firm have the resources to do so without calling upon their malpractice insurance, the deductible of which would be a larger amount anyway.

Can he and his firm go to his client-friend, confess the error and immediately pay the full amount of damages the client might have obtained in order to solve the problem?

Q: Dear Ethics Lawyer, I am an in-house lawyer for a privately held construction company that has recently completed a successful private placement. The CFO came to me with a problem. Shortly before the private offering memorandum was finalized, he received a report from the team on a large international project, labeled as “Preliminary” but indicating that progress was outstanding and projecting substantial profits. The CFO provided the report to the CEO without the “Preliminary” label. Conclusions from the report were used in the offering memorandum.

The CFO says he knew there was some risk in doing this, but also knew the company needed the private offering to be successful and did not believe that the results would materially change. It now appears that those results had been substantially overstated to coincide with our compensation schedule and to pump up bonuses of project management leadership. The CFO says that given a little time the project may well be managed to profitability and an on-time completion. But, he is concerned that he may be fired or exposed to liability and wants my advice as to how he can best stay out of hot water. What are my ethical obligations here?