Fact Pattern 1-1 Susan,the General Manager of ABC Company Begins to Hear Rumors

Fact pattern 1-1
Susan,the general manager of ABC Company begins to hear rumors that corporate taxes are being computed improperly,and perhaps illegally.She calls her in-house counsel,Bob,to ask his advice.Bob recently went to work for ABC Company just after he finished law school.Susan hired him without experience because she did not have to pay him as much as more experienced lawyers.Bob advised Susan that rumors rarely indicate any type of violation but a preliminary investigation should be done to determine if potential problems exist.He advised her that if an investigation indicates the existence of problems,she should keep the information quiet and not report it to her superiors or to the ethics program at the company since she does not want to stir up trouble for herself or Bob.Bob also tells Susan to trust him to make any internal investigation needed because such investigations are best made by in-house counsel.
-Refer to fact pattern 1-1.Which of the following is true regarding Bob's statement that any legal problems should be kept quiet and not disclosed to Susan's superior or the board of directors?

A) Bob is incorrect since if additional information seems to substantiate the rumors,even partially,Susan should report the information through appropriate channels.
B) Bob is incorrect only if the information could potentially implicate Susan's superior.
C) Bob is correct only if potential felony charges are involved.
D) Bob is correct.

Correct Answer:

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