Press Release February 02, 2012

Goodwin at 100: Goodwin and Procter Overcome Their First Challenge - 1914

Like any start-up, Goodwin Procter faced many challenges over its first few years. One of the firm’s earliest and most critical tests came in 1914 when Robert Goodwin and Joseph Procter helped a sardine packing company headquartered in Maine issue some preferred stock.

With no federal Securities and Exchange Commission and only minimal oversight by state authorities, regulation was much less rigorous in 1914 than it is today. Accordingly, the client’s prospectus consisted of a sales circular with a brief description of the new company and its business, a balance sheet, and some language about the provisions protecting preferred stock. Goodwin and Procter were listed as legal counsel and a Boston bank as the company’s transfer agent. Everything looked to be in order as the stock went on sale.

A few days later, though, Procter discovered that the figures listed in its prospectus were false. He quickly called the issuing bank to halt sale of the stock, but $30,000 had already been sold. Procter called in Goodwin to decide how to respond and the partners were in immediate agreement.

Facing the crisis squarely, they borrowed $30,000, secured by their own personal assets, and bought back all outstanding shares at face value. The loan far exceeded the firm’s annual income, but throughout their partnership together, both Goodwin and Procter would affirm their decision as one that established the ethical standard to which they always held their firm.

“It was the best thing Joe Procter and I ever did in our twenty-year association,” Robert Goodwin said later. “We forged a definite standard of professional integrity, and nailed it to the mast of our little ship.”

For more on our firm's history, click here.