On February 4, 2026, Justice Patel of the New York County Commercial Division issued a decision in Lateral Inv. Mgt., LLC v. Marcum, LLP, 2026 NY Slip Op. 30413(U), holding that disclosure of a privileged document to a third party waived privilege for the whole document, explaining:
To the extent that the Investigative Report is privileged, it should be sealed. However, Plaintiffs have waived attorney-client privilege as to this document. In 2019, Plaintiff FTE invited Defendant Marcum, FTE’s auditors at the time, to a meeting at its then-outside counsel’s office to review several binders of documents, including a version of the Investigative Report. This disclosure to a third party operated to waive the privilege. At the conference held before this Court on June 4, 2025, Plaintiffs’ counsel acknowledged as much, stating that the privilege had been waived as to the final report and the exhibits as a result of the disclosure to Marcum at this meeting.
To be sure, Plaintiffs’ counsel further claimed at the time that only a redacted version of the Investigative Report was produced at this 2019 meeting, such that the waiver did not apply to the unredacted version of the Investigative Report, which was only disclosed to the chair of the audit committee and was not produced to any third parties. As characterized by Defendants, the redacted version in question applied redactions to some, but not all, of the footnotes in the report, but not to the body of that report. Waiver of the attorney-client privilege normally compels the production of other documents protected by the privilege which relate to the same subject. Consequently, Plaintiffs’ disclosure of the redacted version of the Investigative Report in 2019 waived the privilege with respect to any documents pertaining to the subject matter of the report. Plaintiffs’ waiver of the attorney-client privilege therefore extends to the full Report, including any material that may have been redactedfrom the version produced in 2019.
(Internal quotations and citations omitted).