Wednesday, September 19, 2007
Fortune is reporting (here) that Melvyn Weiss, a name partner at Milberg Weiss, will be indicted shortly on charges related to secret payments to representative plaintiffs in class actions filed by the firm. Former partner William Lerach just entered a guilty plea to a conspiracy charge that will call for a one- to two-year sentence, while another former name partner, David Bershad, entered a guilty plea earlier that appears to have been the key breakthrough in the investigation. In addition, Steven Schulman, whose name was put on the firm more recently, reportedly will also enter a guilty plea after fighting the charges for over a year. The firm itself was also indicted in 2006, and it too is likely to plead guilty at some point. In its heyday, the firm was called Milberg Weiss Bershad Hynes & Lerach before the 2004 break-up, which means that three of the five "names" in the firm -- Schulman's was added after Lerach left -- will be involved in federal charges related to its conduct. Lawrence Milberg died in 1989, well before the practices at issue in the case occurred. (ph)
UPDATE: The Wall Street Journal Law Blog (here) quotes a press release issued by Milberg Weiss confirming that Melvyn Weiss and the firm will be the subject of charges issued in a superseding indictment by a Los Angeles grand jury:
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’s 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.
With Weiss no longer taking an active management role at the firm, it may be that Milberg Weiss will seek to resolve the charges rather than continue to fight them. (ph)