MELON POST

Abstract

A complex legal malpractice dispute arising from a Financial Crimes Enforcement Network (FinCEN) investigation of Bancrédito International Bank & Trust Corporation, Bancrédito Holding Corporation (BHC), the Bank’s sole shareholder, has brought a derivative action against three law firms—McConnell Valdés LLC, Holland & Knight LLP, and McDermott Will & Schulte LLP—alleging that negligent and conflicting legal advice during the FinCEN inquiry led the Bank to stipulate to willful Bank Secrecy Act (BSA) violations and incur a $15 million civil penalty.

We review the factual background of the case, highlighting the contradiction between counsel’s 2020 assurances that the Bank’s anti-money laundering (AML) controls were adequate and their subsequent advice in 2023 that the Bank admit to widespread compliance failures. We then analyze the governing legal standards for professional malpractice under Florida and Puerto Rico law – including the duty of care, causation, and damages – and explores ancillary issues of attorney-client privilege, fiduciary duties in a bank receivership, conflicts of interest, and the administrative law implications of the Bank’s receivership.

FinCEN’s enforcement powers under 31 U.S.C. §5321 are discussed, particularly the meaning of “willful” violations in civil enforcement. Through this case study, the article illuminates how counsel’s deviation from the standard of care in regulatory matters can have severe financial and legal consequences, and how courts may address the intersection of regulatory enforcement, professional negligence, and the conduct of receivers in the banking context.

Introduction

In September 2025, BHC filed a derivative lawsuit on behalf of its subsidiary Bank against the Bank’s former legal counsel for egregious legal malpractice during a high-stakes AML compliance investigation. The investigation by FinCEN culminated in a Consent Order imposing a staggering $15 million civil fine on the Bank and requiring admissions of BSA/AML violations.

BHC’s complaint alleges that its attorneys’ negligent advice was directly responsible for this outcome: the lawyers purportedly abandoned earlier legal positions that had defended the Bank’s compliance program, and instead counseled the Bank (by then under control of a court-appointed receiver) to concede to FinCEN’s accusations and penalties. These concessions included admitting that the Bank’s AML controls had “deteriorated” and that the Bank had willfully failed to file required suspicious activity reports (SARs) on large volumes of transactions. Notably, these admissions directly contradicted the same firms’ prior assurances in 2020 that the Bank’s BSA/AML program was sound and that certain SAR filings were unnecessary.

The malpractice suit raises pressing issues for legal professionals. It asks whether the attorneys met the applicable standard of care when advising a financial institution facing potential BSA enforcement, and whether their conduct – if proven as alleged – proximately caused the Bank’s loss of $15 million and other damages.

The case also spotlights the ethical and legal complexities of representing a bank in receivership: the receiver acted as the Bank’s management during the FinCEN negotiations, injecting questions of fiduciary duty and conflict of interest into the scenario. Furthermore, the dispute implicates attorney-client privilege concerns, since an obvious defense to FinCEN’s allegations (the Bank’s good-faith reliance on counsel’s earlier compliance advice) was never raised, presumably because doing so would require waiving privilege – a choice that may have favored the lawyers’ interests over the client’s.

Finally, BHC’s parallel litigation against the Bank’s receiver in Puerto Rico adds an administrative law dimension, alleging that the receiver exceeded its statutory authority (ultra vires) and acted in bad faith by capitulating to FinCEN and by mishandling the Bank’s remaining assets.

This article proceeds to outline the factual background and inconsistent legal guidance at the heart of BHC’s claims. It then analyzes the legal framework governing malpractice and professional duties under Florida and Puerto Rico law. Next, it evaluates the specific allegations through that lens – weighing whether counsel’s conduct fell below the standard of care, how causation and damages might be established, and what role attorney-client privilege and conflicts played. The discussion also examines FinCEN’s enforcement powers under 31 U.S.C. § 5321, explaining the significance of the Bank’s admission of “willful” violations in the civil regulatory context. Finally, the article considers the receivership’s conduct under Puerto Rican law, including the fiduciary obligations of a receiver and the potential invalidity of actions taken ultra vires or in bad faith. Through this analysis, legal professionals can glean lessons about the intersection of compliance advice, regulatory enforcement, and malpractice exposure.

Issue Overview

Factual Background

Bancrédito International Bank & Trust was a Puerto Rico–chartered international banking entity offering offshore financial services. As such, it was regulated by the Office of the Commissioner of Financial Institutions of Puerto Rico (OCIF) under Puerto Rico’s International Banking Center law (Act 52), which incorporates federal BSA/AML requirements.

In 2019, OCIF conducted an extensive examination of the Bank’s compliance programs, reviewing hundreds of transactions for potential suspicious activity. To assist in this examination, the Bank in 2020 engaged two law firms – McConnell Valdés (a prominent Puerto Rico firm) and Holland & Knight – to audit the Bank’s BSA/AML controls and provide legal opinions on its compliance status.

These firms undertook a detailed review of the Bank’s transaction monitoring and SAR decisions, effectively second-guessing whether certain alerts or “red flags” truly required SAR filings. In September 2020, McConnell Valdés and Holland & Knight delivered a joint report and letter to OCIF conveying their conclusions. That correspondence – now central to the malpractice case – painted a reassuring picture of the Bank’s compliance. It asserted that the Bank’s AML program was adequate and functioning within regulatory expectations, even if the Bank had elected not to file SARs on certain transactions.

The letter emphasized that deciding whether to file a SAR is “an inherently subjective judgment” for the institution’s management, and that regulators should focus on whether the Bank had an effective decision-making process rather than second-guess individual filing decisions. Per the guidance cited, so long as the Bank followed established procedures and had a reasonable basis for not filing a SAR, it “should not be criticized for the failure to file” absent a significant oversight or evidence of bad faith. In sum, the Bank’s counsel in 2020 concluded that the Bank’s internal controls and judgment calls were sound, and even determined that the Bank’s BSA/AML compliance program had been improving over time with no major deficiencies.

This legal opinion effectively rebuffed OCIF’s initial concerns and resulted in a relatively mild regulatory response – reportedly a Memorandum of Understanding (MOU) in 2021 that identified only a limited number of transactions (32 in total) where SARs might have been required, and imposed a modest $97,000 fine.

However, even as the Bank was addressing OCIF’s examination, FinCEN opened its own investigation in late 2019, likely relying on the same underlying facts OCIF had scrutinized. FinCEN, a bureau of the U.S. Treasury, has nationwide authority to enforce BSA compliance and impose civil penalties. By 2022, the Bank’s situation had worsened: unrelated events (including criminal charges later dropped against the Bank’s principal owner) led to a loss of confidence and the Bank’s placement into receivership by Puerto Rican authorities.

A private entity, Driven Administrative Services (“Driven”), was appointed as receiver to liquidate the Bank, effectively replacing the Bank’s board and management. Driven, acting as the Bank’s fiduciary, retained the same law firms (and additional counsel from a third firm, McDermott Will & Schulte) to represent the Bank in negotiations with FinCEN.

The 2023 FinCEN Consent Order

FinCEN’s inquiry culminated on September 15, 2023 in a negotiated Consent Order signed by the receiver on the Bank’s behalf. The Consent Order imposed a $15,000,000 civil money penalty – an extraordinarily large fine given the Bank’s small size – and required the Bank to admit to a series of alleged compliance failures. These admissions were sweeping. The Bank conceded, for example, that FinCEN had “identified tens of thousands of transactions by high-risk accountholders” flowing through its accounts involving “hundreds of millions of dollars” in activity. The Bank further admitted that its BSA/AML compliance program had “deteriorated over time,” failing to keep pace with its risks.

Perhaps most critically, the Bank agreed that FinCEN’s findings established the Bank had willfully violated the BSA by failing to timely file SARs on over $100 million in suspicious transactions. In other words, the Bank, on counsel’s advice, formally accepted that its conduct met the “willfulness” standard for the highest level of BSA civil penalties. These FinCEN admissions stood in stark contradiction to the position the Bank’s own lawyers had taken just a couple of years earlier. In 2020, counsel told regulators that the Bank’s AML controls were sufficient and even improving; in 2023, counsel allowed the Bank to admit that its compliance had deteriorated.

In 2020, counsel confidently justified the Bank’s decision not to file SARs in certain cases as a proper exercise of business judgment; in 2023, the Bank (at counsel’s urging) conceded that it should have filed hundreds of missing SARs and that its earlier decisions not to file constituted willful violations of law. The dissonance is striking. The malpractice lawsuit centers on this about-face. BHC alleges that Bank’s Counsel negligently abandoned viable defenses and prior advice during the FinCEN negotiations, effectively inducing the receiver to surrender to an overreaching penalty and false factual narrative. According to the complaint, none of the attorneys informed BHC (the shareholder) of the impending settlement or sought its input before the Bank irrevocably consented to these admissions.

Subsequent Proceedings

In the wake of the Consent Order, BHC took action on two fronts. First, it made a formal demand that the receiver (Driven) pursue claims against the lawyers for the harm done to the Bank. The receiver refused, prompting BHC to file the current derivative suit in Florida state court on the Bank’s behalf. Second, BHC separately sued the receiver in Puerto Rico, accusing Driven of breaching its fiduciary duty by agreeing to the FinCEN Order on such unfavorable terms and by failing to protect the Bank’s remaining assets. Notably, by early 2023 the Bank’s liquidation had advanced to the point that all depositors and creditors were paid in full, leaving significant surplus assets that should have reverted to the Bank or its shareholder. BHC claims the receiver exceeded its authority by retaining or disposing of those surplus assets (including an art collection valued over $22 million) instead of returning them to BHC.

These allegations underscore BHC’s broader theme: that those entrusted to manage or advise the Bank acted negligently or ultra vires, to the detriment of the Bank and its owners. In sum, the stage is set for a multifaceted legal battle. The core malpractice case turns on whether the attorneys’ drastic change in advice – from assuring compliance to conceding willful violations – was a breach of their professional duties that proximately caused the Bank’s massive penalty. Surrounding that core are issues of lawyer ethics, regulatory law, and administrative oversight: Was it reasonable for counsel to omit mention of their own prior compliance opinions during settlement talks? Did the receiver and counsel have a conflict of interest that kept them from mounting a vigorous defense? And did the receiver act lawfully in accepting FinCEN’s terms and handling the Bank’s liquidation? These questions are addressed against the relevant legal standards below.

Legal Framework

Professional Malpractice Standards (Florida & Puerto Rico)

The legal claims against the three law firms sound in professional negligence (legal malpractice). To prevail on such a claim, a plaintiff must establish the classic negligence elements as adapted to the attorney-client context. Under Florida law, the elements are typically stated as: (1) the attorney owed a duty of care to the client (arising from the attorney-client relationship); (2) the attorney breached that duty by acting negligently or failing to act as a reasonably competent attorney would under similar circumstances; (3) the attorney’s breach was the proximate cause of damage to the client; and (4) the client incurred actual losses as a result. Puerto Rico law, which applies to the Puerto Rico–based defendant (McConnell Valdés) and the context of the Bank’s receivership, is in accord with these fundamental principles.

In Puerto Rico, legal malpractice (“negligencia profesional”) is generally treated as a species of general tort liability, requiring proof that the attorney’s lack of due care caused harm to the client. The key components mirror those of Florida and other U.S. jurisdictions: an attorney’s duty to adhere to the standard of care of a prudent practitioner, a breach of that duty, causation, and damages. “standard of care” o Notably, attorneys are held to the “standard of care” of a reasonably competent attorney in the same field of practice and under similar conditions. This means, for example, that lawyers advising on specialized regulatory matters (like BSA/AML compliance) are expected to exercise the knowledge, skill, and diligence normally possessed by practitioners experienced in that area.

Both Florida and Puerto Rico recognize that an attorney also owes a fiduciary duty of loyalty to the client. A lawyer’s obligations therefore include not just competence but also placing the client’s interests above the lawyer’s own and avoiding impermissible conflicts of interest. A breach of fiduciary duty by an attorney (such as representing conflicting interests or failing to disclose material information) may independently constitute malpractice or an ethical violation, and it often overlaps with the duty-of-care analysis in a malpractice case.

To prove causation in a legal malpractice claim, the plaintiff (here, BHC on behalf of the Bank) must demonstrate that the attorney’s negligence was both a factual cause and the proximate (legal) cause of the harm. In practical terms, this usually requires a “case-within-a-case” showing: had the attorneys met the standard of care, the client would have achieved a better outcome in the underlying matter. Florida courts, for instance, demand proof that “but for” the lawyer’s negligence, the client would not have suffered the loss – whether it be an adverse judgment or, as here, a larger regulatory penalty than otherwise would have been imposed. Puerto Rico law likewise insists on a direct causal link between the attorney’s acts or omissions and the damages, unbroken by any superseding cause. If the harm would have occurred regardless of the lawyer’s conduct, or if the connection is too speculative, causation (and thus liability) will not be established.

Damages in legal malpractice are compensatory, aiming to put the client in the position it would have been absent the attorney’s negligence. In the context of this case, the primary damage is the difference between the outcome achieved with allegedly negligent counsel (a $15 million fine plus reputational harm) and the outcome that a competent counsel would have obtained (presumably a far smaller penalty or no admission of willful violations). Other damages might include the legal fees expended and consequential losses flowing from the Consent Order (for example, business losses due to reputational damage). Both Florida and Puerto Rico require that damages be actual and quantifiable, not merely speculative.

It should be noted that because BHC’s suit is derivative on behalf of the Bank, any recovery would belong to the Bank (and indirectly benefit the shareholder after creditors). BHC had to satisfy procedural prerequisites such as making a demand on the Bank’s controller (the receiver) to bring the claim. Here, BHC did make a demand which the receiver rejected, allegedly for improper reasons. Under both Florida and Puerto Rico law, a shareholder may proceed derivatively if the company’s managing agents wrongfully refuse to sue or have an inherent conflict of interest in acting. BHC’s complaint indeed cites the receiver’s conflict (since the receiver was working with the implicated law firms) as justification for BHC to pursue the claims itself. This derivative posture does not fundamentally alter the malpractice analysis, but it underscores the unique context: the Bank’s “client” interests were being controlled by a receiver who relied on the very counsel now accused of malpractice.

FinCEN Enforcement Authority and “Willful” Violations

At the center of the dispute is the $15 million civil penalty imposed by FinCEN. Understanding FinCEN’s enforcement powers and the concept of “willful” violations is essential to evaluating the situation. FinCEN’s authority to levy civil penalties for BSA violations comes from the Bank Secrecy Act’s enforcement provisions, chiefly 31 U.S.C. §5321. Under § 5321(a)(1), the Treasury (delegated to FinCEN) may impose a civil money penalty on any financial institution that willfully violates the BSA or its implementing regulations.

The statute does not fix a single penalty amount; rather, it provides maximum limits that can be quite high, especially after inflation adjustments and per-violation calculations. In practice, FinCEN has discretion to determine the penalty amount based on factors like the extent of violations, the harm caused, and the violator’s degree of culpability. By contrast, mere negligent violations of the BSA (absent willfulness) are subject only to much smaller fines – on the order of $500 per violation, capped in total. Thus, classifying the Bank’s compliance failures as “willful” was a prerequisite to the enormous $15 million fine; without willfulness, FinCEN’s penalty would have been dramatically limited.

Importantly, “willful” in the civil BSA context does not mean that the bank intentionally engaged in money laundering or knowingly violated the law. Civil willfulness is defined broadly by regulation and case law to include not only intentional misconduct but also reckless disregard or willful blindness toward regulatory requirements. As FinCEN itself has articulated, to prove a willful BSA violation in a civil enforcement action, the government need only show that the institution “acted with either reckless disregard or willful blindness” to its legal obligations – it is not necessary to show the bank had actual knowledge that its conduct was unlawful or any evil motive. In other words, an AML compliance program deemed grossly inadequate or ignored by management can support a finding of willfulness.

This expansive interpretation lowers FinCEN’s burden; however, a bank still has defenses. A key defense is demonstrating good faith – that any compliance lapses were inadvertent despite an adequate program, or that the bank affirmatively relied on expert guidance. Such circumstances tend to negate the recklessness or willful blindness necessary for “willful” enforcement penalties.

The Consent Order with FinCEN, as described in the complaint, explicitly invoked this civil standard. The Bank admitted to “willfulness” only as that term is used in civil BSA enforcement under §5321. This reservation (often included in consent orders) clarifies that the Bank was not admitting criminal intent or guilt – only the level of culpability relevant for civil fines. Nonetheless, the practical effect was to subject the Bank to the maximum penalties. FinCEN treated the Bank’s failures in monitoring and reporting as egregious enough to warrant one of the largest AML penalties ever for a bank of its size.

In evaluating the attorneys’ actions, it is crucial to appreciate that admitting willful violations was not a legal inevitability but a strategic (and perhaps negligent) choice. FinCEN’s allegations could have been contested. For example, FinCEN claimed the Bank failed to file SARs on “hundreds of millions” in suspicious transactions. The Bank, armed with its lawyers’ 2020 analysis, could have argued that many of those transactions did not actually require SARs under the law or guidance (indeed, OCIF’s prior examination had whittled down the universe of potential misses to 32 transactions). Similarly, FinCEN’s assertion that the AML program “deteriorated” could be rebutted by the fact that independent audits in 2020 and 2021 found the program satisfactory. Most importantly, the Bank had a compelling argument that any compliance shortcomings were not willful because the Bank had been acting in good-faith reliance on expert legal advice. The presence of the 2020 opinion letter and the ongoing counsel guidance would tend to show the Bank was trying to comply, not willfully flouting the law. This advice-of- counsel defense, if raised, might have precluded a finding of willfulness or substantially mitigated the penalty. The FinCEN penalty framework takes intent into account – a bank that can

demonstrate an absence of recklessness or the presence of due diligence and reliance on professional counsel might avoid heavy fines or be deemed merely negligent. In summary, FinCEN’s ability to impose the $15 million fine rested on characterizing the Bank’s conduct as willful non-compliance. Whether the Bank truly met that standard, or whether FinCEN’s allegations could have been overcome or negotiated down, is a central question that overlaps with the alleged legal malpractice. The lawyers’ critics (BHC) argue that competent counsel should not have allowed a willfulness finding to go uncontested when strong factual and legal defenses were available – especially defenses founded on the counsel’s own prior compliance advice. The legal framework of FinCEN enforcement thus provides the backdrop against which the attorneys’ performance will be judged.

Attorney-Client Privilege and Conflict of Interest in Receivership

The scenario also raises unique issues of attorney-client privilege and conflicts of interest, particularly due to the role of the receiver. When the Bank was placed into receivership, the receiver (Driven) assumed control of the Bank’s privilege and the authority to direct the Bank’s legal affairs. In general, a corporation’s management (or its court-appointed fiduciary in receivership or bankruptcy) holds the power to waive or assert the corporation’s attorney-client privilege. Here, that meant the receiver could decide whether to disclose or deploy communications between the Bank and its counsel in order to defend the Bank in the FinCEN matter. A tension quickly arose: one of the best arguments for the Bank would have been “we did not willfully violate the BSA, because we relied on our lawyers’ advice that our compliance was sufficient.” Yet making that argument to FinCEN or a court would effectively waive the privilege as to those communications and put the lawyers’ 2020 advice in play. Doing so could embarrass the law firms involved – it would shine a spotlight on McConnell Valdés and H&K’s prior opinion that no SARs were needed, which FinCEN obviously disagreed with. It might also have created a professional liability risk for them, foreshadowing the very lawsuit that has now been filed.

According to BHC’s complaint, Bank’s Counsel never informed FinCEN of the prior advice or otherwise raised the fact that the Bank had been acting on counsel’s guidance. In settlement talks, the lawyers did not invoke the Bank’s reliance on counsel as a defense to willfulness, nor did they disclose the 2020 OCIF opinion letter or the 2021 OCIF MOU’s favorable findings. This omission is striking, because that information goes to the heart of the Bank’s good faith. The decision not to assert an advice-of-counsel defense (and thereby keep the communications privileged) may have been motivated by the attorneys’ conflict of interest: they would have had to admit their own prior role in approving the very conduct FinCEN was penalizing. In effect, the lawyers found themselves in a position where the client’s best defense was “we only did this because our lawyers said we could” – a defense that implicates those lawyers. A fundamental rule of ethics is that a lawyer must not let personal interests interfere with the representation. Here, if the firms refrained from deploying the advice-of-counsel argument to protect themselves, they arguably breached their duty of loyalty to the Bank. Even if their choice was driven by a more benign rationale (such as a belief that FinCEN would not entertain such a defense), the result was that the Bank abandoned a key defense and accepted the willfulness label without challenge.

The attorney-client privilege aspect is also noteworthy. Ordinarily, communications like the joint 2020 OCIF letter might be considered protected by privilege or work-product (it was a confidential report to a regulator, marked “Confidential Treatment Requested”). However, by sharing it with OCIF, the Bank and its counsel knew regulators would rely on it; and indeed FinCEN appears to have obtained and referenced OCIF’s findings that stemmed from it. In any event, by the time of settlement negotiations, privilege was a thin shield: FinCEN was aware that prior counsel had been involved in the Bank’s compliance decisions. Waiving privilege to explicitly assert “our counsel told us X, so we thought we were compliant” would have been a reasonable strategic move to negate willfulness. Such a waiver could have been limited to those specific communications. The failure to waive privilege for the client’s benefit, if it would have reduced the penalty, can itself be seen as a lapse in the duty of care. Attorneys must use all reasonable, lawful means to defend their client – privilege belongs to the client, not the lawyer, and can be waived if doing so serves the client’s interests.

Complicating matters, the Bank’s representation during receivership blurred lines of loyalty

The receiver was effectively instructing the lawyers, but the lawyers’ true client was still the Bank as an entity. BHC alleges that the receiver and counsel became aligned with each other’s interests instead of the Bank’s interest as owned by the shareholder. McConnell Valdés, in particular, continued to represent the receiver on other matters even after the FinCEN Order, creating a direct conflict since suing the law firm for malpractice would implicate the receiver’s own actions. Such dual relationships raise the question of whether counsel could impartially advise the Bank to potentially resist the receiver’s approach or whether the receiver could impartially evaluate the lawyers’ conduct. Any concurrent representation of the receiver by the very attorneys under scrutiny would violate basic conflict-of-interest principles, as an attorney cannot serve two masters with divergent interests without informed consent.

In summary, the context of the receivership introduced a complex three-way dynamic among the shareholder (BHC), the receiver (Driven), and the counsel (the defendant firms). The receiver held the privilege and ostensibly acted for the Bank, but BHC claims the receiver was influenced by counsel to cover up or ignore their past mistakes. The attorney-client privilege, normally a shield for the client, may have been wielded in a way that shielded the attorneys instead. This interplay is legally significant: it could support BHC’s argument that the normal checks and protections failed, justifying court intervention to hold the attorneys liable and perhaps to void some of the receiver’s actions.

Fiduciary Duties and Administrative Law in the Receivership

The final piece of the framework involves the role and duties of the receiver under Puerto Rico law, as well as the administrative law doctrines governing agency action. In Puerto Rico’s banking regulatory scheme, when a bank is found to be in an unsound condition or unable to meet obligations, OCIF can appoint a receiver or conservator to take control. The receiver’s mission is to marshal the bank’s assets, satisfy liabilities (especially depositor claims), and ultimately wind down or sell the institution. In doing so, the receiver owes fiduciary duties to the bank and its stakeholders – much like a trustee or corporate director. These duties include the obligation to act in good faith and in the best interest of the Bank (which, after debts are paid, means the best interest of the owner/shareholder).

Puerto Rico law also holds that an administrative receiver must stay within the bounds of authority conferred by statute (the bank’s enabling act) and the appointing regulator’s directives. Any action that exceeds the agency’s or receiver’s statutory authority is ultra vires and void. Moreover, if a receiver acts with improper motives or in bad faith, those actions can be challenged as abuses of discretion or breaches of fiduciary duty.

In BHC’s parallel case against Driven (the receiver), BHC argues that Driven violated its fiduciary obligations by effectively capitulating to FinCEN and by mismanaging the Bank’s remaining assets. Once the Bank had repaid all depositors (eliminating the primary justification for continued receivership), the receiver’s role should have been limited to winding up and returning value to the Bank’s shareholder. At that point, the receiver’s decision to agree to a huge penalty – to “give away” $15 million of the Bank’s money – is highly questionable from a fiduciary perspective. If, as alleged, the receiver knew or should have known that FinCEN’s findings were flawed or that the Bank had defenses (especially since the receiver’s own counsel had previously vetted the compliance program), then voluntarily accepting the Consent Order could be seen as a failure to act in the Bank’s best interest. A faithful fiduciary might have fought the fine or at least sought a better settlement.

BHC goes so far as to claim that the receiver’s agreement to the Consent Order was done in bad faith, possibly to quickly conclude the receivership or protect OCIF’s reputation, rather than to vindicate the Bank’s rights. In support of a bad-faith theory, BHC notes that the receiver never notified BHC or sought input before signing the Order, and then refused to consider suing the lawyers whose advice led to that outcome. An even more glaring allegation is the receiver’s handling of surplus assets. Under law, any surplus after satisfying depositors belongs to the Bank (and ultimately its owner). BHC asserts that Driven improperly retained or sold valuable assets, like an art collection, for its own benefit or the government’s, without legal authority. If true, this behavior is ultra vires – beyond the scope of what a receiver can do – and a clear breach of fiduciary duty.

Puerto Rico’s administrative law, as BHC’s 2020 letter to OCIF pointed out in a different context, dictates that agencies (and by extension their appointed receivers) have only the powers granted by statute, and any act outside those powers is invalid. The Bank’s enabling act and OCIF’s regulations would not empower a receiver to confiscate shareholder property once all liabilities are met. Thus, BHC frames the receiver’s retention of the $22 million in art as not just a civil wrong but legally null. If a court agrees, it could order those assets returned to the Bank or BHC.

For the malpractice case, the relevance of the receivership’s conduct is twofold. First, it provides context that the Bank’s true interests may not have been adequately represented during the FinCEN settlement – a point that bolsters the claim that counsel and the receiver together failed the Bank. Second, any finding that the receiver acted improperly (in bad faith or ultra vires) in agreeing to the FinCEN Order could indirectly support the contention that no reasonable professional (whether receiver or lawyer) should have gone along with that deal. BHC essentially contends that the Consent Order was not only unnecessary but an unlawful act by the receiver, done on the basis of negligent legal advice. If a court were to find the Consent Order ultra vires or void, that would dramatically vindicate BHC’s position (though FinCEN, not a party here, would likely contest any attempt to invalidate the Order). At minimum, demonstrating the receiver’s conflict of interest – Driven’s lawyers being the same firms accused of malpractice – helps explain why the Bank itself did not sue the lawyers, necessitating BHC’s derivative action.

In summary, Puerto Rico law supplies a backdrop of strict boundaries for the receiver’s behavior and a mandate of loyalty and care toward the Bank’s stakeholders. BHC’s allegations, if proven, would mean the receiver transgressed those boundaries, lending weight to the overall narrative of professional failings and misguided decisions compounding to harm the Bank. The legal framework thus allows the court to scrutinize not just the lawyers in isolation, but the entire decision-making process that led to the Bank’s undue punishment.

Argument Analysis

Inconsistent Advice and Breach of the Standard of Care

One of the strongest indicia of potential malpractice in this case is the stark inconsistency between the counsel’s 2020 advice and their 2023 approach. Competent counsel are expected to maintain consistency in legal positions absent a change in facts or law. If their understanding of the Bank’s compliance in 2020 was that it met BSA/AML standards, it is incumbent on them to either stand by that position or explain why new developments justify a change. Here, there was no apparent material change in the factual record between the OCIF examination and the FinCEN enforcement – the alleged violations FinCEN pursued were substantially the same issues OCIF had identified (foreign high-risk transactions, potential missing SARs). The lawyers’ own earlier work had largely addressed those issues. By 2023, the Bank’s compliance program was not active (the bank was in liquidation), so any “deterioration” in the program could only refer to historical conduct already reviewed. Thus, a key question is whether any reasonable attorney in 2023 would have advised the Bank to effectively repudiate its 2020 stance and concede willful compliance failures.

BHC’s complaint forcefully argues the answer is no. It alleges that “Bank’s Counsel, or any reasonable counsel acting under the circumstances, would not have advised the Bank to agree to the Consent Order” with its broad admissions and severe penalties. This statement encapsulates the breach of the standard of care: a prudent attorney in the same scenario would have found FinCEN’s proposed findings unsupported by the factual record and far too damaging to accept, and thus would have counseled against signing such an order. Instead, a competent lawyer would have marshaled the available evidence to challenge FinCEN’s claims – evidence that included the counsel’s own prior conclusions and the OCIF 2021 MOU’s limited findings. The attorneys in question not only failed to mount these defenses but actively advised the Bank (through the receiver) to abandon its former position that its compliance was adequate. If proven, that conduct is hard to reconcile with the exercise of reasonable professional judgment.

It bears emphasizing how compelling the Bank’s defenses could have been had counsel pursued them. First, the discrepancy in number of SAR violations – 32 versus “hundreds” – strongly suggests that FinCEN overstated the problem. OCIF’s detailed review, aided by the same law firms, found only a few dozen questionable instances after “further review,” whereas FinCEN alleged an order of magnitude more. A diligent attorney would question FinCEN’s methodology and insist on a granular rebuttal, rather than capitulate. Second, the audits and improvements in the compliance program were documented positives. Any claim of deterioration could be met with evidence that, for example, the Bank had invested in better monitoring systems or tightened its policies over time (indeed, the Bank had a robust correspondent banking monitoring system and escalation procedures, as described in the 2020 letter). Ignoring these facts and agreeing the program deteriorated appears indefensible if counsel remembered their own prior findings. Third, counsel knew that the Bank’s management relied on their advice when choosing not to file certain SARs. To then fault the Bank for those very decisions (by admitting they were violations) is arguably to confess the lawyers’ own error. A competent, conflict-free attorney would not lightly make such a confession on a client’s behalf; rather, they would maintain that those SAR decisions were the product of reasonable judgment calls given the information and guidance available at the time. By all indications, Bank’s Counsel in 2023 did not even attempt to justify or contextualize the Bank’s past decisions – a sharp deviation from the expected standard of zealous advocacy.

In defense of the lawyers, one might argue that by 2023 the practical realities had changed: the Bank was defunct and in receivership, FinCEN might have threatened worse consequences (like referring matters for criminal enforcement or penalizing individuals), and the receiver was motivated to resolve outstanding issues quickly. However, even under difficult circumstances, counsel’s duty of care does not evaporate. Advising a client to agree to false or unsubstantiated findings is never within the scope of reasonable professional conduct. Attorneys are officers of the court (or in this case, officers of the administrative process) and should not sanction admissions that they know – from their own prior work – to be factually “false and erroneous”. The complaint explicitly alleges that all the admitted facts were known by the lawyers to be false. If a factfinder agrees that the lawyers possessed contrary knowledge (from 2020) yet counseled the Bank to admit those facts, it is a textbook breach of the duty of candor to the client and arguably an ethical breach as well. No conceivable tactical advantage justified such admissions because, as the outcome shows, they led directly to a maximal fine.

Therefore, the inconsistent advice is likely to be seen as a strong evidence of negligence. The standard of care in regulatory negotiations would require an attorney to advocate consistent with the client’s true position and interests. Here the Bank’s true position (if one assumes the 2020 advice was given in good faith) was that it did not willfully violate BSA requirements. Counsel’s job was to assert that position or negotiate within its bounds. By flipping to essentially agree with the regulator’s worst characterization, counsel arguably fell below any reasonable standard of skill and diligence. This breach is compounded by the apparent conflict of interest: the counsel’s new position conveniently shielded them from scrutiny over the old position. A trier of fact could infer that the lawyers’ divided loyalties led them to dispense advice harmful to the client – itself a breach of fiduciary duty and care.

Causation and the “But-For” World

Proving malpractice also requires showing that the lawyers’ breach caused the Bank’s harm. The harm is clear: $15,000,000 paid (or owed) to the U.S. Treasury, plus reputational damage and loss of business opportunities (though the Bank was closing, the fine depleted assets that otherwise could go to BHC). The causation inquiry asks: would this have happened absent the lawyers’ negligence? BHC’s case is essentially that but for the faulty advice, the Bank would not have agreed to such a punitive consent order and would have obtained a far better outcome. This contention is strongly supported by the contrast with the OCIF outcome. With proper advocacy, the Bank’s regulatory issues had been contained to a $97,000 penalty and minor corrective actions in 2021. It stands to reason that FinCEN, acting on largely the same underlying facts, could have been persuaded to a similarly modest resolution had the Bank’s counsel pressed the same defenses.

The complaint effectively presents a controlled experiment in causation: two different approaches to the same problem yielded two very different penalties. Under OCIF (with counsel contesting allegations and standing by their advice), only 32 transactions were deemed SARworthy and the fine was negligible. Under FinCEN (with counsel conceding everything), “hundreds” of violations were admitted and the fine was over 150 times greater. This side-by-side comparison is perhaps the most persuasive evidence of causation in the malpractice case. It shows the magnitude of damage directly correlating with the presence or absence of a vigorous defense. Any argument that FinCEN would have imposed $15 million regardless of the lawyers’ actions seems implausible in light of these facts. FinCEN’s own penalty guidelines (and past enforcement cases) suggest that where an institution demonstrates cooperation and some credible defenses, the penalties are typically much lower. Indeed, FinCEN might not have insisted on a willfulness admission at all if the Bank made a strong showing of good faith reliance on counsel.

Additionally, there is the matter of the Bank’s forfeited defenses. By not raising advice-ofcounsel and other arguments, counsel left FinCEN’s willfulness theory unchallenged. A court or FinCEN itself could have been swayed by those defenses if presented. The fact that FinCEN included a footnote in the Order limiting the admission of “willfulness” to the civil context hints that FinCEN anticipated the Bank might worry about broader implications – in other words, FinCEN knew it was asking for a heavy concession. If counsel had pushed back, FinCEN might have settled for a lesser admission (e.g. negligent violations) or a smaller penalty to avoid litigation. We can reasonably infer that the lawyers’ recommendation to accept FinCEN’s terms was the direct cause of the Bank suffering the maximal regulatory consequences. But for that recommendation, the Bank could have either litigated (with a chance of no liability if willfulness wasn’t proved) or negotiated a consent order on much more favorable terms.

It is also worth noting that the receiver’s incentives were shaped by counsel’s advice. The receiver likely relied on what its attorneys were telling it about the strength of FinCEN’s case and the advisability of settlement. If those attorneys negligently overstated FinCEN’s hand or failed to convey the available defenses, the receiver’s decision to settle high can be traced to that legal advice. In a derivative suit, the company can recover for harm caused by mis-advice even if a third party (here, the receiver) formally made the decision, so long as that decision was guided by the negligent counsel. Thus, causation can be established by showing the receiver would not have signed the $15 million Consent Order had it been properly informed and advised.

One potential wrinkle is whether any intervening cause broke the chain of causation. The defendants might argue that FinCEN’s actions were an independent force – e.g. FinCEN was determined to impose a huge fine due to external political pressures (perhaps related to the highprofile criminal investigation of the Bank’s owner) and that no lawyer could have altered that outcome. If FinCEN was completely unyielding, then arguably the loss was inevitable. However, this argument runs up against the fact that FinCEN’s case was largely built on the Bank’s own admissions. FinCEN can impose penalties unilaterally, but typically a target would have the opportunity to respond to a notice of violation, negotiate, or go to a hearing. Had the Bank not consented, FinCEN would have had to prove willful violations before an administrative law judge, where the Bank could have mounted a defense. It is far from certain FinCEN would have prevailed on all points – FinCEN’s success became assured only when the Bank capitulated. Therefore, the causation likely stays squarely with the negligent advice leading to the capitulation. FinCEN’s pressure is not an unforeseeable intervening cause; it is the very pressure lawyers are hired to resist or navigate. Indeed, the foreseeability of severe penalties absent a proper defense was precisely the risk that competent counsel would guard against. That foreseeability strengthens, rather than weakens, the causal link between counsel’s breach and the harm incurred.

In conclusion, the causation element in BHC’s malpractice claim appears well-supported by a compelling comparison between what did happen and what should have happened. With proper legal advocacy, the Bank most likely would have avoided a finding of willfulness and the bulk of the $15 million fine. The difference between the $97,000 OCIF penalty and the $15,000,000 FinCEN penalty is stark – and that difference is plausibly attributable to the attorneys’ failures. If the case proceeds to trial, one can expect expert testimony reinforcing that FinCEN enforcement outcomes depend greatly on counsel’s effectiveness, and that here counsel’s ineffectiveness (or divided loyalties) directly cost the Bank millions.

Privilege, Defense Strategy, and Ethical Duties

The role of attorney-client privilege and the advice-of-counsel defense in this saga warrants further analysis, as it is intertwined with both breach and causation. By all accounts, the Bank’s previous reliance on counsel’s advice was a double-edged sword: it was the best shield against willfulness, but wielding that shield required exposing the counsel to scrutiny. Ethically and legally, once the Bank was facing ruinous penalties, the lawyers should have advised in favor of using every meritorious defense, even if it meant their prior advice would be examined or even criticized. The privilege belonged to the Bank (then controlled by the receiver). The attorneys could not unilaterally waive it – that was the receiver’s call – but they could recommend doing so as a strategy. If they failed to even present that option out of self-interest, it’s an ethical lapse. If they presented it and the receiver declined for its own reasons (say, not wanting to complicate matters), one might argue the lawyers did their job. BHC’s pleading, however, implies the lawyers themselves “failed to notify FinCEN” of the prior advice or the fact that the Bank acted on counsel’s guidance. That sounds like the decision was made within the litigation/negotiation strategy, likely at the lawyers’ recommendation, to keep that information hidden.

Choosing not to assert the advice-of-counsel defense had a profound effect: it left FinCEN with an uncontested narrative of willfulness. The question is whether that choice was within the range of reasonable professional judgment or a glaring mistake. Under the circumstances, asserting the defense was the logical course if the goal was to minimize the Bank’s liability. It is hard to conceive a reasonable tactical reason to not use it, except if one assumes the lawyers felt personally conflicted. Their conflict is underscored by the fact that two of the defendant firms (McConnell Valdés and H&K) were the very sources of the advice in question. A new set of lawyers, free from that history, might have had no qualms raising it. Indeed, the presence of the third firm (MWS) is interesting: one might expect those attorneys, who presumably joined later, to objectively push the advice-of-counsel argument since it would help the client. If they did not, perhaps they deferred to McConnell and H&K’s preferences or were not fully informed of the 2020 advice’s details. In any event, from an analytical standpoint, failing to waive privilege in this scenario appears to have been a costly error, and one driven by conflict rather than strategy.

Ethical Duty of Loyalty

This leads to the broader ethical duty of loyalty. An attorney’s fiduciary duty means that if the client’s legal position would be improved by disclosing something adverse to the attorney (like an error in prior advice), the attorney must nevertheless act in the client’s interest. The client can later decide whether to pursue a claim against the attorney for that error, but the attorney cannot preempt that by suppressing the information to the client’s detriment. Here, if by saying “our earlier advice was wrong in hindsight but was relied upon, so the Bank should not be penalized,” the Bank could have avoided willfulness, the lawyers had a duty to make that argument or at least inform the receiver of that possibility. Their continued representation despite this inherent conflict is itself questionable. Normally, upon recognizing that their own prior work was a central issue in the enforcement matter, McConnell Valdés and H&K might have needed to withdraw or bring in truly independent counsel to handle the FinCEN negotiations. Instead, they stayed on, and as BHC alleges, protected their own earlier stance at the client’s expense. If proven, that is a serious breach of ethical obligations, and it bolsters the malpractice claim by showing conscious preference of self-interest over client interest.

From a causation perspective, one might ask: had the lawyers asserted the privilege-waiving defense, would it really have changed FinCEN’s stance? There is a strong argument that it would. FinCEN, when faced with an advice-of-counsel defense, might have had to reconsider labeling the violations willful. FinCEN does not lightly accuse institutions of willfulness when the institutions can document that they sought and followed legal advice – doing so would make the enforcement action look punitive rather than remedial. At the very least, FinCEN might have settled for a lower penalty rather than litigate a case where the bank could show it tried in good faith to comply. Thus, the decision not to waive privilege likely caused tangible prejudice, satisfying the causation element.

Legally, some courts hold that merely asserting an advice-of-counsel defense waives privilege as to the subject matter, while others require an affirmative act of disclosure. In negotiation, the Bank didn’t need a court ruling; it could simply choose to share the 2020 opinion letter and related communications to bolster its position. That this did not happen speaks volumes about the attorneys’ priorities. It effectively left the Bank disarmed.

In conclusion on this point, the attorneys’ handling of privilege and conflicts may itself be viewed as malpractice within the malpractice. It is both evidence of their negligence (and disloyalty) and a causal factor that aggravated the outcome. A court assessing this scenario would likely find that a conflict-free lawyer would have pursued a very different course – one that would either avoid the conflict (by withdrawing) or waive privilege and use the earlier advice as a sword to defend the Bank. The absence of either happening strongly tilts the scales toward a finding of professional fault.

The Receiver’s Actions: Ultra Vires and Bad Faith?

Although the malpractice defendants are the law firms and not the receiver, the receiver’s conduct is intertwined with the analysis. The receiver was effectively the decision-maker who executed the Consent Order and refused to sue the lawyers, but those decisions were made on counsel’s advice and are relevant to both breach and causation. If the receiver acted improperly (ultra vires or in bad faith), that further supports the notion that the attorneys should not have facilitated or acquiesced in those actions.

The ultra vires argument is particularly intriguing. If BHC were to establish in the Puerto Rico courts that Driven (the receiver) exceeded its authority by entering the Consent Order or by failing to return assets, then theoretically the Consent Order could be deemed invalid or unenforceable against the Bank’s shareholder. For example, if the receiver had no power to bind the Bank to pay $15 million once the Bank was solvent enough to satisfy depositors, that act might be void. While exploring that outcome is beyond this article’s scope, the mere assertion of ultra vires highlights how irregular the settlement was. Typically, a receiver’s duty is to conserve assets, not surrender them unnecessarily. BHC’s portrayal is that the receiver breached its fiduciary duty by accepting FinCEN’s terms without a fight, effectively giving away a large portion of the Bank’s residual value. This alleged dereliction aligns with the malpractice claim: both posit that the professionals handling the Bank’s response to regulators failed to act prudently and loyally.

From the law firms’ perspective, they might argue they simply followed the receiver’s instructions – if the receiver wanted to settle, the lawyers facilitated that. However, the receiver’s own motivations were tainted by the involvement of those same firms. McConnell Valdés was still advising Driven on other matters, creating an incentive for the receiver to trust McConnell Valdés’s guidance unquestioningly and perhaps to avoid adverse actions against that firm. The receiver’s rejection of BHC’s demand to sue the firms, accompanied by a statement that doing so was not in the Bank’s interest and would only prolong liquidation, arguably shows a protective attitude toward the firms rather than an unbiased business judgment. In derivative litigation analysis, such facts can demonstrate that the normal presumption of good faith business judgment by the company’s managers (here, the receiver) is rebutted. In other words, BHC can proceed because the receiver’s decision not to pursue the claim was conflicted and not a valid exercise of discretion. That seems clearly the case here: the receiver had an ongoing relationship with at least one defendant firm, so it had an interest in not accusing them of negligence.

Thus, the receiver’s conduct does double duty in the analysis. It is potentially independently wrongful (giving BHC another avenue of relief), and it is symptomatic of the deeper problem – the Bank’s fiduciaries and advisors were not acting solely for the Bank’s benefit. The overlap of players (receiver and counsel effectively on the same side) undermined the checks and balances that might have saved the Bank from an overzealous enforcement action.

Legally, if this case goes to trial, the defendants might try to argue that the receiver’s independent decision to sign the Order breaks the causal chain or absolves the lawyers: i.e., “we advised, but the receiver decided.” This is unlikely to succeed given the receiver’s lack of independence in reality. The receiver relied on counsel’s investigation, analysis, and negotiation; there is no indication Driven had separate internal expertise on BSA matters. So if the advice was negligent, the receiver’s decision is not a superseding cause but rather the foreseeable implementation of that advice. Moreover, since the receiver may have acted wrongfully, it cannot serve as a shield for the attorneys – the law does not countenance using a client’s bad faith as a defense by the professionals who induced or allowed that bad faith act.

Finally, consider the constitutional dimension briefly. BHC’s complaint and letters hint at constitutional or fundamental administrative law principles: an agency (or its receiver) acting beyond statutory authority or in bad faith could violate due process rights of those affected (here, the shareholder’s property interest in the Bank’s assets). While not pleaded as such in the malpractice suit, this notion lurks in the background. It suggests that the entire process that led to the Bank’s penalty was tainted by legal error and unfairness. If proven, that environment of unfairness would make it even more compelling to hold the lawyers accountable, since they were the ones who should have objected to or corrected the irregularities. For instance, if OCIF or the receiver didn’t have authority to do something, the lawyers should have said so at the time (as they themselves noted, agency powers are limited). Their failure to invoke the ultra vires doctrine when the receiver supposedly exceeded its mandate (by not consulting BHC or by not relinquishing assets) could be seen as another lapse in representation.

In summary, analyzing the receiver’s actions through the lens of fiduciary duty and administrative law reinforces the case that the Bank’s legal representatives did not do what competent, loyal counsel would do: protect the Bank’s interests zealously within the bounds of law. Instead, they facilitated or at least did not prevent a series of actions that were detrimental and possibly unlawful. This confluence of missteps by both the receiver and the attorneys paints a picture of a fundamentally mishandled regulatory resolution – exactly what a malpractice claim seeks to redress.

Conclusion

The lawsuit Bancrédito Holding Corp. v. McConnell Valdés LLC, et al. exemplifies the grave consequences that can ensue when legal counsel’s advice in a regulatory enforcement context falls below professional standards. At its heart, the case is a cautionary tale of how inconsistent and conflict-ridden legal guidance can turn a solvable compliance problem into a catastrophic outcome. The Bank’s attorneys assured regulators in 2020 that all was well, only to advise the Bank in 2023 to confess that everything was amiss – a 180-degree reversal that yielded a draconian $15 million fine and damning admissions of willful misconduct. Such an outcome was not a mere misfortune or a cost of doing business; according to BHC, it was the direct result of negligent legal representation and a breach of the duty of loyalty owed to the Bank.

Our analysis has traced the legal framework governing these events. Under both Florida and Puerto Rico law, attorneys must act with the competence and care of a reasonable professional and must remain loyal to their client’s interests. The allegations indicate these duties were breached: no reasonable banking attorney would advise a client to accept unfounded “willful” violation findings without pressing every available defense, especially when those defenses derive from the attorney’s own prior advice. The proximate result of this breach was the imposition of an excessively harsh penalty that – as evidenced by the far milder OCIF outcome – would likely have been avoided with proper counsel. In the rubric of malpractice law, the Bank suffered a loss that appears to be the product of its lawyers’ lapses, not an inevitable fate.

Beyond the core negligence claim, the case shines a light on ethical and procedural facets that often accompany high-stakes compliance matters. It underscores the importance of addressing conflicts of interest head-on: had independent counsel been engaged once the original lawyers’ conduct was in question, the Bank’s defenses might have been asserted more vigorously. It also illustrates the delicate role of attorney-client privilege. Lawyers must remember that the privilege is the client’s tool, to be used or waived in service of the client’s defense – not a convenient shelter for the lawyers’ own errors. A competent attorney faced with FinCEN’s willfulness allegation would have likely advised the Bank to waive privilege over its 2020 compliance advice, thereby demonstrating the Bank’s good faith and undercutting FinCEN’s case. That this did not happen in Bancrédito’s situation suggests a failure of independent judgment on counsel’s part.

Furthermore, the involvement of a receiver does not diminish attorneys’ duties; if anything, it heightens the need for clarity and diligence. A receiver operates under constraints of public law and owes fiduciary duties similar to a director or trustee. The attorneys representing a company in receivership must navigate not only the client’s immediate needs but also the statutory limits on the receiver’s powers. Here, the receiver’s decision to acquiesce to FinCEN and its handling of the Bank’s assets have been called into question as ultra vires and disloyal. While those charges are pending in a separate forum, they reinforce the notion that the Bank’s legal and fiduciary caretakers failed collectively. For the courts adjudicating the malpractice claim, such circumstances may inform the evaluation of what a prudent lawyer would have done – for example, a prudent lawyer might have reminded the receiver of its duty to resist unfounded penalties and to maximize the value for the shareholder once depositors were safe.

In an era of aggressive regulatory enforcement in the financial sector, this case also highlights FinCEN’s formidable powers and the necessity for counsel to push back when appropriate. FinCEN can impose ruinous fines for compliance failures, but it must meet the legal standards of willfulness or negligence as applicable. The Bancrédito Bank had a colorable argument that it was not a willful offender, an argument grounded in contemporaneous legal advice and efforts to comply. The tragedy – and the basis for liability – is that this argument was never presented. The lesson for practitioners is clear: when advising clients in enforcement actions, consistency, preparation, and fearless advocacy are paramount. Lawyers must raise all good-faith defenses, even if it means scrutinizing their own prior work or straining a relationship with the regulator. The client’s interest in a fair outcome must come first.

Ultimately, the resolution of BHC’s claims will depend on factual determinations yet to be made – about what the lawyers knew and advised at each stage, and about whether different actions would have altered the FinCEN outcome. If BHC substantiates its allegations, this could become a landmark case delineating the scope of attorneys’ liability in regulatory compliance matters. It would send a powerful message : law firms that counsel banks on compliance will be held accountable if they give green lights one day and lead their clients into an ambush the next. In the meantime, the Bancrédito case stands as a compelling study for legal professionals, illustrating how missteps in advice and strategy, especially under the unique pressures of a receivership and federal enforcement, can generate a perfect storm of professional liability. The hope is that by analyzing such failures, future counsel and fiduciaries will navigate the storm more safely – steering their clients away from needless admissions of wrongdoing and towards outcomes that reflect the true merits of their compliance efforts.