Federal Judge Rules Prosecutors Can Access Startup Founder's AI Chat Transcripts

The decision raises concerns about the legal status of privileged information shared with chatbots.

Published on Feb. 13, 2026

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A federal judge ruled that prosecutors could access the Claude chat transcripts of Brad Heppner, a finance startup founder accused of defrauding a company out of $150 million. Heppner's lawyers argued the chats were privileged, but the judge said Heppner had disclosed the information to a third-party AI, negating the privilege. The decision highlights the legal risks of using chatbots to discuss sensitive legal matters.

Why it matters

This case underscores the potential legal pitfalls of using AI chatbots to discuss privileged information. As the use of conversational AI tools becomes more widespread, there are growing concerns that people may inadvertently waive attorney-client privilege or other legal protections by sharing sensitive information with these systems.

The details

Heppner, who helped start the finance firm Beneficient, was arrested last year and charged with wire and securities fraud. Investigators seized dozens of electronic devices when they arrested Heppner, and his lawyers argued that 31 chats with Anthropic's Claude bot on those devices were privileged. However, Judge Jed Rakoff ruled that by disclosing the information to a third-party AI, Heppner had effectively waived the privilege, even though the chats were intended to be shared with his lawyers.

  • Heppner received a subpoena, hired lawyers, and learned he was a target of prosecutors before the chats with Claude occurred.
  • Heppner was arrested last year and charged with wire and securities fraud.

The players

Brad Heppner

A finance startup founder accused of defrauding a company out of $150 million.

Judge Jed Rakoff

The federal judge who ruled that prosecutors could access Heppner's Claude chat transcripts.

Anthropic

The company that developed the Claude AI chatbot used by Heppner.

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What they’re saying

“Mr. Heppner — using an AI tool — prepared reports that outlined defense strategy, that outlined what he might argue with respect to the facts and the law that we anticipated that the government might be charging.”

— Heppner's lawyer

“Even though Heppner had privileged conversations with his lawyers, Judge Jed Rakoff said he "disclosed it to a third-party, in effect, AI, which had an express provision that what was submitted was not confidential.”

— Judge Jed Rakoff

What’s next

The judge's decision is likely to be appealed, and the case could set important legal precedents around the use of AI chatbots and attorney-client privilege.

The takeaway

This case highlights the growing legal risks associated with using AI chatbots to discuss sensitive information. As conversational AI becomes more prevalent, people must be cautious about what they share with these systems, as the courts may not always uphold claims of privilege or confidentiality.