Thursday, May 31, 2007
Two items in the news raise the question whether they are just a coincidence, or whether more is going on than meets the eye. A Wall Street Journal story (from the always-interesting and entertaining Law Blog here) states that former Milberg Weiss name partner David Bershad may be negotiating a guilty plea in the prosecution of the firm and another partner for paying secret kickbacks to lead plaintiffs in class actions. Bershad was responsible for the law firm's finances, and was accused of making cash payments from a safe hidden in a credenza in his office. If Bershad were to plead guilty and, more importantly, cooperate with the government, this would be a significant break in the case. For Milberg Weiss, any admission of criminal conduct by Bershad would be proof of the firm's liability, making it much more difficult, if not impossible, to defend against the charges.
Now for the coincidence. A Washington Post story (here) indicates that William Lerach, formerly with Milberg Weiss before a nasty break-up of the firm, is planning to leave his new law firm, Lerach Coughlin. Both Lerach and Melvyn Weiss were rumored to be involved in the federal criminal investigation, although both received letters from prosecutors at one point stating they were not targets of the investigation. Lerach has been a leading advocate for shareholder class actions in the securities field, and it is unlikely he will leave the scene completely. The timing of his decision, coming at the same time as news of Bershad's possible cooperation, is certainly interesting. Then again, I've never been much of a conspiracy theorist, so it may just be a coincidence. (ph)