Thursday, September 20, 2007
In the latest blow to Milberg Weiss, the once-powerful class action law firm now facing criminal charges for undisclosed payments the firm allegedly made to class representatives, an indictment against lead partner Mel Weiss is anticipated today. The firm released the following statement yesterday:
Milberg Weiss understands that a second superseding indictment will be
issued tomorrow that will include new charges against the Firm and also
Melvyn Weiss. Mr. Weiss has decided to discontinue his participation in
Firm management in order to focus on the defense of the charges against
him. The Firm's other partners, none of whom is alleged to have been
involved in any wrongdoing, will be responsible for its management and
litigation activities. Mr. Weiss will remain available to counsel clients
and Firm attorneys. The Firm remains proud of Mr. Weiss' and the Firm's
accomplishments over the years and will continue to fight for its clients
and class members and to produce the excellent results for which it is
known. We do not anticipate any interruption in our work and we look
forward to putting this difficult period behind us.
An article in today's Wall Street Journal -- Milberg's Weiss May Face Indictment in Kickback Case -- reports on the development, emphasizing the importance of Weiss as a target of the investigation:
Having secured a plea agreement this week with one of its biggest targets in the criminal prosecution of the Milberg Weiss law firm, the government is moving forward against another.
Melvyn Weiss, co-founder of the plaintiffs firm and a pioneer in the field of securities class-action cases, is expected to be indicted today in Los Angeles, according to people familiar with the situation. An indictment would come more than a year after Milberg and two then-name partners were charged with fraud for allegedly paying kickbacks to clients to induce them to serve as lead plaintiffs in lucrative securities class actions and shareholder suits. ...
It is expected that the indictment will charge Mr. Weiss with helping to steer secret payments to clients who served as lead plaintiffs in class actions; it will also raise a charge new to the case -- that Mr. Weiss allegedly obstructed justice by failing to turn over a document subpoenaed by prosecutors, according to people familiar with the case.
Although the firm is best known for its work in securities class actions, Milberg Weiss has represented plaintiffs in significant mass tort litigation in the past decade, including Rezulin, Zyprexa, Vioxx, fen-phen, and Exxon Valdez litigation.