Shimon has a reliable reputation, but I have firsthand knowledge that he has exploited people in the past. Shimon is aware of the fact that I know this about him and had me promise that I wouldn’t tell anyone. Reuven is considering investing with Shimon and asked me if I thought it was a safe investment. On the one hand, I promised Shimon that I wouldn’t tell anyone; on the other hand, I don’t want Reuven to lose money. Either way, I am concerned about any possible claims against me.

Q: What am I allowed to tell Reuven?

A: The prohibition of speaking lashon hora is well known, but at times, speaking negatively about someone is not only permitted, but even mandated. If a friend is about to suffer a loss, the Biblical prohibition of lo sa’amod al dam rei’echo (Vayikra 19:16), standing idly as another is harmed, instructs the bystander to prevent his friend from suffering that loss. Rambam explains that refusing to testify violates this prohibition if the testimony could prevent a friend from suffering a financial loss. In addition, by giving testimony, one also fulfills the mitzvah of hashavas aveidah – returning a lost object to a friend (Rambam Sefer haMitzvos Prohibition 297). The same obligation is in force any time one can prevent a friend from suffering a loss (C.M.259:9, Pischei Teshuvah 28:1).

Although the prohibition of lashon hora is very severe, it is an even greater transgression to refuse, out of concern for the prohibition against lashon hora, to share information that could save someone from suffering a loss. Refusal in this instance violates the prohibition of lo sa’amod. As such, if one sees a person’s employee or partner stealing from him, it is obligatory to apprise the victim of the theft. The same is true if one sees someone behaving dishonestly in a business transaction or someone about to lend money to an unreliable individual (Pischei Teshuvah O.C. 156).

It is clear that one must share negative information about someone to prevent another person from suffering a loss. However, the question in your case is whether your promise to Shimon that you would not tell anybody about his exploitations is similar to an oath. The issue of the binding nature of one’s commitment not to share a secret is debated amongst Poskim. Most Poskim agree that the obligation to prevent someone from suffering a financial loss outweighs a commitment not to share a secret. If one actually took a vow not to share information, the matter would require a consultation with an expert in this area of halacha (see Nesivos 28:1, Y.D. 239:7).

In summary, you are not only permitted to share the information about Shimon with Reuven, but you are obligated to tell him even if he had not asked you. As such, Shimon has no claim on you that you caused him damage by sharing negative information with Reuven. However, you must not exaggerate and do your best to relay just the facts that occurred in the relevant incident(s) without including your own subjective attitude towards Shimon. It is advisable to review with a competent Rav what you should say and how to respond to follow-up questions that Reuven may have for you (see Chofetz Chaim vol. 2: 9).