Daniel Fisher at Forbes explains:
…The rise of the “confidential witness” can be traced to the Public Securities Litigation Reform Act and subsequent Supreme Court rulings, under which class-action lawyers are required to do more than just point out the obvious, that a stock price fell. They need to state “particularized facts” giving a strong inference that somebody in management, not just a faceless corporate entity, did something he or she knew was fraudulent.
To get over this hurdle, class-action lawyers frequently call upon nameless “confidential witnesses” who apparently are willing to speak with plaintiff lawyers but live in fear of their identities being revealed to anyone else.
Funny thing is, the testimony of these confidential witnesses on eventually reaching the light of day keeps not backing up the propositions the lawyers said it did. The newest embarrassment afflicts Robbins Geller, a successor law firm to Bill Lerach’s Coughlin Stoia. More: ABA Journal; City of Livonia Employees Retirement System v. Boeing.
Tagged as:
Coughlin Stoia,
Milberg Weiss,
securities litigation
More reviews of the new Lerach book (earlier). Kevin LaCroix:
…The authors explain in their Prologue that initially, Dillon had intended to co-author a book with Lerach, but that project got waylaid when it became clear that Lerach’s legal difficulties were serious. …
Lerach’s skill and his excesses emerged in his first successful case in San Diego, in which he represented a group of retirees against the Methodist Church. Lerach’s legal performance was by all accounts brilliant, and produced a great result for his clients. But, the authors note, “along with the good came the other things: the hubris, the taunting, the acrimony with the opposing side, the hyperpartisanship borne of the Manichean world view.” …
The authors also methodically show how so much of Lerach’s crusading activities depending on his firm’s corrupt system for procuring plaintiffs on whose behalf to bring the suit, as well as on the testimony of a corrupt expert witness.
Howard Sirota:
…Bill Lerach did not invent the criminal conspiracy; he joined it in progress. His “full cooperation” fails to name names and take numbers. … Lerach knows, but he isn’t telling, because the statute of limitations has not yet run for all of his crimes. …
Nevertheless, “Circle of Greed” is a must-read for lawyers and judges because even a “limited hang-out” by Bill Lerach reveals far more than he intended.
An excerpt from the book is at Politics Daily. LaCroix also interviews the authors (who note that while Lerach encouraged stories about a supposed conspiracy to get him, the Milberg prosecution “was managed by a dedicated civil servant in the Los Angeles U.S. attorney’s office named Richard Robinson who is not only a career prosecutor, but a Democrat.”) And San Diego public broadcasting outlet KPBS runs its Dillon-and-Lerach interview under the gag-worthy headline, “The Story Of Bill Lerach’s Fighting For Consumers.”
More: Seth Hettena, Voice of San Diego, profile and interview.
Tagged as:
Bill Lerach,
Milberg Weiss
All four have completed their sentences and don’t seem to have it so bad, judging by a March 19 Bloomberg story. William Lerach is going to teach at a law school and work for a “progressive think-tank.” And for the Milberg law firm itself? “Over the past couple of years, while everybody has been laying off lawyers and cutting pay, we’ve been giving lawyers raises and extra bonuses.”
Tagged as:
Bill Lerach,
Coughlin Stoia,
crime and punishment,
Melvyn Weiss,
Milberg Weiss
- Greenwich, Connecticut real estate board may discipline member whose blog (often linked in this space) regularly pokes fun at overpriced houses. Antitrust/First Amendment problem? [Chris Fountain, For What It's Worth]
- “Religious group sued for allegedly inciting harm through prayers” [USA Today]
- Legally driven waste of water in parched California should reopen Endangered Species Act debate [Max Schulz, American Spectator] “More Unintended Consequences — Endangered Species Edition” [Ronald Bailey, Reason; related AEI panel]
- “Apple v Woolworth re Apple Logos In Australia” [Trademark Blog]
- Speaking of Australia, Consumers Union’s Consumerist site publishes fake “Aussie McDonald’s fraud plot” memo as real — revises post later, but without mentioning it was taken in by hoax [HardArticle]
- Pennsylvania couple learns about squatter’s-rights law the hard way [Hazleton Standard Speaker]
- Maybe Saratoga Springs, N.Y. will let middle schoolers bike — or even walk! — to school [Albany Times-Union, Lenore Skenazy/Free Range Kids, Patrick at Popehat, Doug Mataconis/Liberty Papers]
- Milberg, the disgraced class action firm of Mel Weiss and Bill Lerach fame, is hot again [NLJ]
Tagged as:
Apple,
Australia,
Bill Lerach,
California,
churches,
Connecticut,
endangered species,
McDonald's,
Melvyn Weiss,
Milberg Weiss,
Pennsylvania,
real estate,
schools,
trademarks,
urban legends about lawsuits
Economist John Torkelsen, a star expert witness for Milberg Weiss in many cases, declared in a sworn deposition that he was working for an hourly fee in a case in which he estimated damages to class clients to be more than $165 million in one of Milberg’s cases against casino operator Lakes Entertainment. In reality, Torkelsen had a concealed contingency fee arrangement with Milberg that helped ensure his incentives would be lined up in favor of a high damages estimate. Now Lakes wants its settlement back with treble damages, saying it would never have offered such a high settlement had Torkelsen’s true relationship to the law firm been disclosed (cross-posted from Point of Law).
Tagged as:
John Torkelsen,
Milberg Weiss
Last year New York trial judge Herman Cahn ruled in favor of class-action giant Milberg in a high-profile dispute over whether it could share its winnings from past cases with disgraced felon and former name partner Melvyn Weiss, the firm’s former driving force. Judge Cahn stepped down from the New York bench in December, and now it develops has been hired by Milberg as its “distinguished” new attorney. And you — with the Wall Street Journal’s editorialists today — certainly have a suspicious mind. There probably won’t be any shortage of funds with which to pay the former jurist: an American Lawyer headline last month read “Milberg Among Plaintiffs Firms Awarded $120 Million in Xerox Class Action”.
Tagged as:
judges,
Melvyn Weiss,
Milberg Weiss,
New York
A week ago I briefly noted that now-imprisoned securities class action king Mel Weiss appeared on the list of Bernard Madoff victims (163-pp. PDF courtesy WSJ, via Christopher Fountain) and observed how ironic it seemed that someone who made great claims to expertise in sniffing out stock fraud should have been taken in by it.
According to correspondence from New York securities lawyer (and longtime Weiss critic) Howard Sirota, however, there might be to the story than that:
I wouldn’t be so quick to jump to the conclusion that Mel Weiss [fouled] up investing with Madoff.
Weiss’ wife and son Stephen A. Weiss invested with Madoff, as did [Milberg Weiss partners] David Bershad and Pat Hynes.
In addition, convicted serial Milberg plaintiff Howard Vogel invested with Madoff.
Buchbinder Tunick, Milberg’s accountants and ironically Milberg’s principal forensic accounting experts, appear on the list, although the entries may be clients of the Buchbinder firm.
Class action firms Wolf Popper and Wolf Haldenstein also appear.
Sirota believes that other persons and entities on the Madoff victims list have also served as lead plaintiffs in securities litigation or as plaintiffs in other litigation handled by class-action firms. All of which could be mere coincidence, or could suggest that either Madoff himself or others in his circle might have played some role in funneling lead plaintiffs to the class-action bar. (Particularly in the “race to the courthouse” era that preceded the Private Securities Litigation Reform Act, having a stable of cooperative repeat plaintiffs was vital to the success of many plaintiff’s firms.)
One way to check this thesis, Sirota suggests, would be to check the names on the Madoff victims list against those on the list of plaintiffs maintained by the Stanford Law School securities class action clearinghouse to see whether there are any other noteworthy matches and if so whether they follow any particular pattern. He also asks whether some of the law firms that have been organizing task forces to recruit and represent plaintiffs in the Madoff scandals — they include the Milberg firm and Wolf Haldenstein — have adequately disclosed to potential clients in their literature that their firms’ own names figure on the Madoff victims list. More: Gary Weiss, Larry Ribstein.
Further: Yet more views. And in comments, a visitor says Wolf Haldenstein is on the list because clients of the firm invested with Madoff, not because the firm itself did.
Tagged as:
accounting,
Bernard Madoff,
David Bershad,
Milberg Weiss,
scandals,
securities litigation
American Lawyer has the story (more: AmLaw Daily, ABA Journal). Because, if you asked why the former dean of the shareholder class-action plaintiff’s bar deserved those hundreds of millions in court-ordered fees, you would have been told that society needed to reward his unsurpassed skills at sniffing out securities fraud. Can you imagine how Weiss as a lawyer would have shredded some hapless middleman financial defendant who thought it wasn’t necessary to do due diligence on an investment manager in placing funds because, well, he seemed like a nice guy at the time?
Weiss is in jail now on unrelated charges, of course, but he might make a fun person to name as lead plaintiff in a suit against Madoff.
Tagged as:
Bernard Madoff,
Melvyn Weiss,
Milberg Weiss
[Originally published in the early hours of Dec. 7. Bumped Monday afternoon to reflect new developments and reader interest; updated Tuesday morning.]
News accounts are still piecing together the strange story of high-powered New York litigator Marc Dreier and his arrest by Canadian officials on charges of “impersonation”. Allegedly, Dreier posed as an official of the Ontario Teachers’ Pension Plan to support his pretense that he had a guarantee for a $50 million investment he was seeking from a hedge fund. (Sinclair Stewart, Paul Waldie and Timothy Appleby, “From $50-million deal to $100,000 bail – in a N.Y. minute”, Toronto Globe and Mail, Dec. 6). The blog Above the Law broke the story and has been on top of later developments (Dec. 4, more posts). Dreier LLP, a 250-person law firm that is said to have been owned outright by Dreier rather than run as a partnership, was “one of several firms that hired refugees from Milberg Weiss after that firm was indicted”. (Nate Raymond, “Arrest of Dreier Founder Clouds Firm’s Future”, American Lawyer, Dec. 5; NYLJ, Dec. 8; NYT, Dec. 5).
More: Huge developments on Monday:
Marc Dreier, the owner of a prominent New York law firm who was arrested last week, was hit Monday with criminal charges and civil complaints alleging he defrauded investors of about $100 million by selling them phony financial instruments.
Federal prosecutors on Monday unsealed charges of one count each of securities and wire fraud, describing a bizarre scheme to bilk hedge funds. [U.S. Complaint at ClusterStock] The Securities and Exchange Commission filed a civil suit making largely the same allegations against the 58-year-old Mr. Dreier….
The criminal and civil complaints released Monday offer the following account of events: Mr. Dreier fabricated promissory notes by an unnamed New York real-estate developer — identified as Solow Realty by a person with knowledge of the situation — and sold them to hedge funds, when in fact such notes were never issued. He fabricated supporting financial statements, and letters from an accounting firm using the firm’s logo, that purported to audit the statements. The SEC complaint says $113 million in phony notes was deposited to an account in the name of the law firm.
Scott Greenfield has more on reports circulating of missing escrow accounts and is stunned at the magnitude of the allegations: if true, “the firm is now at the epicenter of perhaps the greatest instance of lawyer dishonesty ever.” [Updated Tuesday morning to replace breaking-news WSJ account with paper's most recent version; see comments section regarding an apparent inaccuracy in earlier version.]
Tagged as:
Marc Dreier,
Milberg Weiss
- M.D.s and J.D.s in cahoots: when neuroradiologists over-read MRIs in search of “disc herniations” and “cord compression” [ER Stories]
- Lawyer burns his Harvard law diploma, and stop with that joking in the back row about whether there’s some way to burn all of them [ABA Journal]
- Latest lawsuit arising from fad for photos of “Hot Chicks with Dorky Men” (that’s a paraphrase) [TMZ, QuizLaw, earlier]
- Kid draws scary Hallowe’en mask, and next thing you know the police are called [Savannah Morning News]
- Great moments in international human rights: “Modern European navies are now so mindful of the legal loopholes they face in tackling pirates that they often instruct commanders to simply let them go.” [Telegraph; earlier here, here]
- China has four times the number of people we have in the U.S., while we have seven times the number of lawyers [Elefant]
- “Vaccine injury” lawyer Clifford Shoemaker fails in effort to curtail public access to fee information, so we get to learn more about his $211,663.37 bill to the government [Seidel, Neurodiversity; related here and here]
- More about that Milberg basketball team and its 6′ 8″ ringer [Supreme Dicta]
Tagged as:
Harvard,
international human rights,
medical,
Milberg Weiss,
vaccines,
zero tolerance
- NYC judge tosses injury suit against Lawyers Athletic League filed by a player on Milberg’s team [NYLJ]
- Kentucky fen-phen lawyers Gallion and Cunningham disbarred [Lexington Herald-Leader]
- Worker’s comp doc claims he noticed abnormal lab result and told patient to check with his primary doc. Patient didn’t and harm ensued. Malpractice? [CalLaw Legal Pad, KevinMD, Happy Hospitalist]
- Federalist Society publishes text of Judge Dennis Jacobs’s speech on pro bono, but Chemerinsky digs in rather than apologize [PoL]
- Are HIPAA privacy rules suspended during emergencies? No, and what lovely situations that’s likely to cause [HIPAA blog, more]
- One of the more unusual personal injury lawyer websites is “like a touchy-feely hybrid of Myst and The Office” [Above the Law]
- Gold-collar criminal defense work? McAfee decides $12 million too rich a sum for defending CFO Prabhat Goyal [Bennett & Bennett, Greenfield]
- Sounds promising: “Texas Supreme Court decision could end peremptory strikes in jury selection” [SE Texas Record]
Tagged as:
chasing clients,
feeing frenzy,
HIPAA,
jury selection,
Kentucky fen-phen settlement fraud,
Milberg Weiss,
Texas
- Sure enough, former Milberg lawyers sue the convicted ex-Milberg lawyers for breach of fiduciary duty. I was wondering when that was going to happen. [WSJ Law Blog; NYLJ/law.com; earlier]
- Why file grievance against a fellow attorney who’s only stolen $200,000 from clients? Colleagues wonder [Las Vegas Review-Journal via ABA]
- Judge: No evidence of wrongdoing by Kenneth Pasternak. Too bad he can’t get his three years back. Meanwhile SEC keeps bringing enforcement cases on same repeatedly rejected theory of liability. [WSJ; Law Blog]
- “What the AP and The New York Times’ Hansell don’t seem to realize is how hostile an act it is to send lawyer letters to individuals.” [Jarvis via Patterico]
- “When judges act like politicians, the judicial selection process – elected or appointed – becomes increasingly political. Action and reaction. The politicization of the court led to the politicization of the elections for justices. … When justices arrogate political policymaking to themselves, they should not be surprised when they are held to the same standards as politicians.” [Wisconsin Policy Research Institute via American Courthouse; I said that, too]
- Even Susan Estrich finds the Alex Kozinski web site mini-to-do as evidence of media bias. [Estrich; Patterico link roundup]
- Senator McCaskill shows her ignorance on the Anheuser-Busch merger and corporate officer duties. [Hodak]
- A clever attorney will already have a fill-in-the-blanks product liability complaint drafted against Lego. [Childs]
- Hugo Chavez expropriates wealth to consolidate dictatorship. American lawyer helps. Somehow I don’t think we’ll see an Alien Tort Claims Act suit against his law firm. [AmLaw Daily]
Tagged as:
Alex Kozinski,
antitrust,
bullying businesses,
ethics,
judicial elections,
media,
media bias,
Milberg Weiss,
Missouri,
nastygrams,
state high courts,
Wisconsin
Jonathan D. Glater reports that the former Milberg Weiss will pay $75 million over five years; the government will release a statement saying no current attorneys committed wrongdoing. (”Firm to Settle Class-Action Case for $75 Million”, NY Times, Jun. 17; also W$J). The W$J says the firm will admit that it committed wrongdoing in the past, but will not actually plead guilty–i.e., the same sort of deferred prosecution agreement that the NY Times recently condemned in the context of business. (To be clear: I’m not objecting to a deferred prosecution agreement here. Felony convictions for entities are usually effectively death sentences, and that is pointless if the guilty parties have actually left the building.)
[click to continue…]
Tagged as:
Coughlin Stoia,
crime and punishment,
Milberg Weiss,
scandals
- High school graduation got rained out in Gilbert, Ariz., and a dad wants $400 from the school district for that [Arizona Republic]
- Happens all the time in one-way fee shift awards, but still worth noting: lawyer in police-misconduct case “billed 22 hours at $480 an hour — a total of $10,560 — just to figure out how much his fees are going to be” [Seattle Times]
- We get to decide and that’s that: New York judge orders that salaries of New York judges including his own be raised [PoL, Bader] Also at Point of Law: white-shoe Clifford Chance throws a party for New York lefties, should anyone be surprised? outsourcing of interrogation to profit-minded private contractors is bad when it’s Blackwater, good when it’s Motley Rice; tax break for trial lawyers said to be blocked for now.
- One firefighter killed in Boston restaurant blaze had sky-high .27 blood alcohol level, the other traces of cocaine, which probably won’t impede the inevitable lawsuit against the restaurant and other defendants [Globe, background]
- Writing again on U.S. exceptionalism, Adam Liptak contrasts our First Amendment with Canadian speech trials; James Taranto thinks he’s siding with the Canadians, but the piece looks pretty balanced to me [NYTimes, WSJ Best of the Web]
- Milberg said to be on verge of deferred prosecution agreement deal with feds involving $75 million payment and admissions of wrongdoing [NLJ]
- Courts in Australian state of Victoria, emulating a model tried in Canada, will resort more to mediation of intractable disputes [Victoria AG Rob Hulls/Melbourne Age]
- Great moments in international human rights: KGB spy on the lam sues British government for confiscating royalties he was hoping to make from his autobiography [five years ago on Overlawyered]
Tagged as:
Arizona,
Australia,
Boston,
firefighters,
free speech in Canada,
international law,
judges,
loser pays,
Milberg Weiss,
New York state,
restaurants,
schools
- Screening firm hired by Beaumont, Tex.’s Provost Umphrey to do mass silicosis x-rays at Pennsylvania hotels is fined $80,500 for breaking various state rules, like the one requiring that a medical professional be on hand [Childs]
- Milberg Weiss’s special way of obtaining perfectly pliant clients — that is to say by bribing them under the table — harmed other class members by increasing fees but not settlement sums, suggests a new study by St. John’s lawprof Michael Perino for Ted’s project at AEI [Carter Wood @ PoL]
- Time for Texas to join many other states in requiring lawyers to inform clients when practicing without professional liability insurance [SE Texas Record; earlier here, here and here]
- Lawyers, in concert with their public pension fund allies, jockey for control of securities case against Bear Stearns [Gerstein/NY Sun]
- Another court, this time in California, rules that a screw maker can’t sue a law firm on the claim that its solicitation of potential claimants wrongly portrayed the company’s products as defective; amicus brief from state trial lawyers group and Sen. Sheila Kuehl says relevant provisions of state’s “SLAPP” law were “meant to protect plaintiffs groups, not companies” [The Recorder via ABA Journal; earlier case from Tennessee]
- Most lucrative Google AdSense words still dominated by asbestos and other personal injury practice, the top terms being “mesothelioma treatment options” ($69.10 per click, and the point of obtaining the click is not to provide treatment options), “mesothelioma risk” ($66.46), and “personal injury lawyer michigan” ($65.85) [CyberWyre via NAM "Shop Floor"; more here, here, etc.]
Tagged as:
AEI,
asbestos,
Bear Stearns,
California,
chasing clients,
Google,
mass screenings,
Milberg Weiss,
Provost Umphrey,
silicosis,
Texas,
x-rays
Mel Weiss — yes, that Melvyn Weiss, of Milberg Weiss, the one who ran a corrupt but lucrative kickback scheme premised on systematic lies to judges over decades, then stonewalled its disclosure through years of investigation — “deserves recognition as ‘one of the greatest humanitarians of our time,’ according to a sentencing memo his lawyer filed Friday.” (Ben Hallman, “Urging Leniency, Big Names Go to Bat for Mel Weiss”, American Lawyer, May 28).
Included were more than 240 supportive letters filed by friends and well-wishers of the famously piratical class-actioneer. It’s hard to read the WSJ law blog’s excerpts from these letters without shedding a tear of admiration:
“Donald Kempf, the former chief legal officer at Morgan Stanley says that after an unexpected on-the-street encounter, Weiss offered to help Kempf find a certain kind of watch. “And he did.”
According to a letter submitted by a friend and art dealer in Sun Valley, Idaho, in a “spontaneous” gesture while in Vienna, Weiss bought the art dealer’s wife an expensive pair of boots.
(WSJ law blog, May 27). The roster (PDF) of character vouchers and pleaders for leniency includes many names familiar to readers of this site, including Stephen Susman, Benedict Morelli (president of the New York State Trial Lawyers Association), David Boies, Stan Chesley, Edward Labaton, and Christopher Seeger; the list is headed by lawprof and frequent Milberg Weiss expert witness Arthur Miller. We commented in February on the similar batch of letters on behalf of Weiss’s felonious collaborator Bill Lerach.
Tagged as:
Bill Lerach,
class actions,
David Boies,
Melvyn Weiss,
Milberg Weiss
