Posted on 12/31/2009 7:00:11 PM PST by AtlasStalled
A federal judge in Manhattan dismissed most of a lawsuit against Milberg LLP, brought by former clients who accused the law firm of paying them millions of dollars to serve as lead plaintiffs in class actions. The plaintiffs sought to recover their attorneys' fees.
U.S. District Judge Loretta A. Preska dismissed the plaintiffs' racketeering claims as time-barred, but kept alive a breach of fiduciary duty charge.
Melvyn Weiss, David Bershad, William Lerach and Steven Schulman, four ex-partners of the law firm, pleaded guilty to paying kickbacks to clients in order to induce them to file suits. Prosecutors said the fraud spanned more than 25 years.
The New York-based firm, formally known as Milberg Weiss, Milberg Weiss & Bershad, and Milberg Weiss Bershad & Schulman, specializes in suing corporations in securities fraud class actions.
Milberg attorneys allegedly paid kickbacks to lead plaintiffs, overstated the extent and nature of their clients' injuries, and caused plaintiffs to lie in depositions and court documents.
* * *
Preska allowed one claim for breach of fiduciary duty to proceed, saying it met the six-year statute of limitations.
Milberg LLP, founded in 1965, was responsible for 85 percent of all securities class actions in California in 2001, the judge said, citing an Associated Press report.
(Excerpt) Read more at courthousenews.com ...
March 23, 2008
LEGAL EAGLES PLUCKED; PROBE PUTS CLASS BACK IN LAWSUITS
By PAUL THARP, NY POST
EXCERPT Lawyer Melvyn Weiss and lawyers for five plaintiffs face years behind bars for rigging class-action cases.... The government's probe and the stunning guilty pleas have helped usher in a new era of legal transparency aimed at eliminating the payoffs of plaintiffs and other underhanded maneuvers.
The US Chamber of Commerce hailed the cleanup of the class-action crowd. "For 25 years these officers of the court disregarded their responsibilities to their clients and corrupted the legal system for their own gain," said Lisa Rickard, president. "Bill Lerach and Mel Weiss practically invented the securities class-action lawsuit and used it throughout their careers to cause major harm to our judicial system."
The Milberg Weiss scandal centered on kickbacks paid to clients to build up class-action cases.......and brought down four top lawyers at Milberg Weiss, one of the nation's biggest class-action firms. Weiss pleaded guilty to giving kickbacks to clients to induce them to sue big companies.....that allegedly earned Milberg Weiss $216 million in ill-gotten fees. In one year, Milberg Weiss was lead counsel in 17 class-action lawsuits that settled for a total of $3.8 billion.
FATHER-SON NAILED - Dickie Scruggs, 61, and his son Zach, 33 - were famous for their $206 million tobacco lawsuit settlements in 1998 that inspired the movie "The Insider." They were indicted last year..... The elder Scruggs pleaded guilty to bribing a Mississippi judge to throw $26.5 million in fees his way in Hurricane Katrina insurance cases, while his son Zach pleaded guilty on to similar bribery conspiracy charges.
SOURCE http://www.nypost.com/seven/03232008/business/legal_eagles_plucked_103108.htm
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May 16, 2003, NY POST
(POLITICAL QUID PRO QUO?) Milberg Weiss urges "give cash....or else."
Some attorneys say powerhouse law firm Milberg Weiss hinted they must give campaign cash to Sen. Charles Schumer (D-NY) if they want potentially lucrative work on securities class-action lawsuits, The NY Post learned. In a meeting in New York to dole out work on these lawsuits, the senior partner at the firm urged attendees to support Schumer financially. Melvyn Weiss, who led the meeting, recommended that they send cash to Schumer in order to hold off Republican efforts at tort reform. That suggested to some that they needed to cough up cash if they wanted to participate in the imporant and lucrative tasks on the case, which dictate how much they collect in legal fees when damages were awarded.
Weiss later backtracked from his remarks in a memorandum, but he had his reps call various law firms to see if they have sent checks to Schumer, according to a source at one firm that has received one of these telephone calls.
"Sen. Schumer knew nothing about Weiss' meeting until told by the New York Post, and certainly believes that nobody should feel pressured to contribute," Schumer spokesman Phil Singer said.
But it's not the first instance of aggressive campaign fundraising in Schumer's name. The Post reported recently, employees at a private security company were pressed to donate to Schumer's campaign, and once they did, Schumer introduced legislation favorable to their company.
Weiss' NY meeting was called to ostensibly discuss large class-action effort that alleges Wall Street brokerages engaged in price fixing for IPO's during the late-1990s bull market. The litigation effort comprised around 900 individual lawsuits on roughly 300 IPOs.
At the meeting Milberg Weiss organized, Weiss told the group, "I hold some cards here and I'm going to use them," according to the notes of a source who was there. Paraphrasing Weiss, a source told The Post that the big-shot lawyer said: "I've asked you to contribute before and I'm asking you to contribute again. But this time you're going to do it."
Four days later, on April 11, Weiss (apparently panicking) sent a memo to attendees saying he did not mean to link campaign cash to participation in the class-action suits. "I want to clarify confusion that may have arisen from my remarks," he wrote. "As you know, I am strongly committed to the zealous protection of shareholder rights and believe that it is critical that we support elected officials who are equally committed. "The enthusiasm I expressed, however, should not be misconstrued. While I urge you all to support these important causes, your participation or lack of participation cannot and will not affect in any way the role you play in this case." (The Post obtained a copy of Weiss' memo.)
BIG DEMOCRAT BACKERS Milberg Weiss and its employees have made frequent campaign donations to Democrats over the years. The firm's name came up in the 1990s during the uproar over so-called "soft money," (unlimited donations to a political party). Campaign finance reforms challenge and regulate such party donations.
Predictably, lawyer Milberg was a big supporter of Bill Clinton, then still in office. (ED. It is not known if Clinton delivered quid pro quos for financial support).
Why am I also NOT surprised that the US Attorney, (or Attorneys, plural) for the Southern District of New York has never indicted Chuck the Schmuck for corruption and other associated Federal crimes. (In Chicago (Northern District of IL actually) Patrick Fitzgerald would have had him locked up long ago with evidence like that in the article).
And why am I also NOT surprised by these 'plaintiff's' actions as described in the lead sentence. They were in on the scams (Fraud, Perjury, etc) then they try to sue to recover the legal fees their criminal conspirators took from the scams. Only in NYC could something like that happen. As only in NYC would criminals have the Chutzpah (1) to try.
(1) Thought I'd use a nice 'NYC centric' word. In Chi, we don't say 'Chutzpah'.
Happy New Year!:-)
I thought all the dirty money was cleansed out of political campaigns. s/
The NY Post reported employees at a private security company were pressed to donate to Schumer's campaign, and once he had the money, Schumer introduced legislation favorable to the company.
I’d also like to see this schmuck’s “earmarks.” And his LLC’s. And his offshore bank accounts. And the books from his "foundation."
Happy New year—looking forward to your posts in 2010.
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