In 1992, in a case which generated one of the most prominent legal ethics controversies of the decade, Nussbaum represented the leading law firm of Kaye Scholer. A government agency sued Kay Scholer charging it with improperly withholding damaging information about its client, a large federal savings and loan association whose failure epitomized the savings and loan disaster in the early 1990s. The law firm vehemently denied it anything wrong in representing its client; it maintained it had an obligation to represent its client zealously and not to disclose information harmful to its client.