Alerts2.24.26
Federal Court Rules Documents Prepared Using Public AI Tools Not Protected by Attorney-Client Privilege
Highlights
- A recent ruling from the U.S. District Court for the Southern District of New York carries significant implications for businesses and individuals who use publicly available artificial intelligence (AI) tools.
- In U.S. v. Heppner, Judge Jed S. Rakoff held that documents prepared by a criminal defendant using a public AI tool and subsequently shared with his attorneys were not protected by attorney-client privilege.
The case involves Bradley Heppner, the former CEO of Beneficient, a Texas-based financial services company. Federal prosecutors have charged Heppner with fraud in connection with an alleged scheme involving GWG Holdings, a publicly traded company that had invested heavily in Beneficient. According to the government, Heppner misappropriated approximately $150 million for his personal benefit before GWG filed for bankruptcy, resulting in roughly $1 billion in losses to investors. Heppner has denied guilt and contested the charges, arguing in part that the indictment improperly attributes GWG's bankruptcy to his conduct.
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