This section contains the nature of the case and procedural background.

D made a public offering pursuant to a registration statement filed with the SEC. Stuart Charles Goldberg was an attorney in the firm and had done some work on the issue. P purchased shares at $17 a share. Others bought stock as well. The stock was down to $7 per share by the time Ps filed this suit. Ps alleged that the registration statement and the prospectus were materially false and misleading. Goldberg had become associated with D's law firm, Sitomer, in November 1971. Goldberg worked on phases of various registration statements including D’s, although another associate was responsible for the D registration statement and prospectus. D expressed concern over what he regarded as excessive fees, the nondisclosure or inadequate disclosure thereof, and the extent to which they might include a 'finder's fee,' both as to D and other issues. Goldberg insisted on a full and complete disclosure of fees. The Sitomer partners (D) disagreed, and Goldberg resigned. Goldberg appeared before the SEC and placed before it information. Upon being informed that he was to be included as a defendant in the impending action, Goldberg asked for an opportunity to demonstrate that he had been unaware of the finder's fee arrangement which, he said, Ds had concealed from him all along. Goldberg gave Ps' counsel a copy of an affidavit which he had authored more than three months earlier. He hoped that it would verify his nonparticipation in the finder's fee omission and convince P that he should not be a defendant. Goldberg was dropped as a defendant. Ds asked that Ps’ law firm be disqualified under Canons 4 and 9. The court ordered Ps’ firm and Goldberg be barred from acting as counsel or participating with counsel for Ps and from disclosing confidential information to others. Ps appealed.

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