In the Matter of Ray D. Lathan

Summary

The Supreme Court of South Carolina accepted an agreement for discipline by consent and suspended Ray D. Lathan from practicing law for six months, retroactive to his interim suspension. The disciplinary matter arose from inaccurate HUD-1 settlement statements and related failures in real estate closings, including representations concerning borrower funds and disbursements. The court also articulated standards requiring settlement statements and attorney records to accurately reflect all funds paid and disbursed, and later reinstated Lathan upon his compliance with reinstatement requirements.

Holdings

1. The court accepted the Agreement for Discipline by Consent and imposed a definite six-month suspension from the practice of law, retroactive to the respondent's interim suspension.
2. An attorney violates professional-conduct obligations by making or failing to correct material misrepresentations in HUD-1 Settlement Statements, failing to disclose information when necessary to avoid assisting a client's fraud, and failing to maintain appropriate supervision and firm procedures.
3. Costs, credits, and all amounts paid in a real-estate transaction must be accurately shown on the settlement statement, including amounts paid outside closing identified as such; the attorney must maintain records of payment methods, receipts, and disbursements, and the records must correspond to the settlement statement unless all parties, including the lender, provide written documentation authorizing otherwise.

Questions Presented

1. Whether the court should accept the Agreement for Discipline by Consent and impose the agreed-upon discipline.
2. What professional-conduct violations resulted from submitting HUD-1 Settlement Statements and related closing documents that did not accurately reflect receipts, disbursements, and amounts paid outside closing.
3. What standards attorneys must follow when preparing settlement statements and maintaining records of funds exchanged in real-estate closings.

Disposition

other