May 17, 2006
Milberg Weiss Indictment?
Federal prosecutors are deciding whether to indict the country's highest-profile plaintiff securities class action law firm, Milberg Weiss Bershad & Schulman, for illegal payments to class action plaintiff/clients. Two of the named partners, Bershad and Schulman, who may be charged personally, have taken leaves of absence from the firm. There is no doubt great rejoicing in the board rooms of the many companies that have felt the sting of Milberg's lawsuits. It takes a well-funded, dedicated firm to mount large scale plaintiff securities litigation. One plaintiff's lawyer keeps many, many defense lawyer's busy. A defense firm can also do other kinds of business consulting and compliance work for companies -- a plaintiff's firm is a pariah to corporate legal counsel. Defense counsel can be part of a large corporate law firm; plaintiff class action counsel cannot. Defense lawyers are paid by the hour; plaintiffs lawyers by a portion of the result, often delayed well after expenses must be paid. In short the defense side is the comfort zone, the safe bet, for "excellence" and prestige in the corporate bar. The plaintiffs lawyers are the risk takers. There should be no surprise that plaintiffs lawyers push the boundaries of litigation and that corporations want to stifle them. I hope the prosecutors are doing the right thing here. In any event, with larger shareholders stepping into these suits under the 1995 legislation (favoring the choice of the largest complaining shareholder as class action plaintiff), the temptation of class action firms to find and compensate "front" individual shareholders to act as plaintiffs is diminishing with time.
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Millberg et al are the slime of the legal profession. It's good news that Justice has indicted the firm and some of the partners. I hope all the bad actors with no ethics ultimately succumb to the Justice indictments.
Posted by: david | May 19, 2006 2:47:49 PM
I hope these dirty bastards rot in a jail somewhere. They are the scum of the earth
Posted by: Dan Golden | May 19, 2006 2:58:42 PM