If I were you, I'd call a bencher first.

I had the idea that we're obligated to report a breach of undertaking (as well as knowledge of some one screwing with their trust accounts) but that must be incorrect, because I cannot find such a rule or guideline anywhere.

Remember, you CANNOT threaten to report a lawyer to the law society. You either do or you don't.

Depending on the advice you get from the bencher, I wonder if a letter citing certain portions of Chapter 11 of the Professional Conduct Handbook might move things along... I'm interested in hearing other views on this situation.