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Friday, May 19, 2006
Law - Nation's leading class-action securities law firm, Milberg Weiss Bershad & Schulman, and two of its partners, indicted
"U.S. Indictment for Big Law Firm in Class Actions" is the headline of a front-page story today in the NY Times. The story begins:
The nation's leading class-action securities law firm, Milberg Weiss Bershad & Schulman, and two of its partners were charged yesterday with making more than $11 million in secret payments to three individuals who served as plaintiffs in more than 150 lawsuits.The indictment is the first instance of a law firm with national reach facing criminal charges, and it could prove to be a fatal blow for the firm. The lawsuits cited in the indictment spanned two decades, occurring as recently as 2005, and generated some $216 million in legal fees for the firm.
Its lucrative business made Milberg Weiss a target for political critics who saw the firm as a symbol of a national litigation industry that had gone out of control. These critics said that many of the firm's lawsuits against corporations were frivolous, raising the cost of doing business.
The critics contended that investors, for the most part, saw only pennies on the dollar from any recoveries won by the firm. In the 1990's, Congress raised the legal hurdle for such lawsuits in large part in response to Milberg Weiss. Even so, the firm continued to thrive.
Posted by Marcia Oddi on May 19, 2006 07:32 AM
Posted to General Law Related