Posts Tagged ‘Milberg Weiss’

“Judge Tosses Boeing Suit After ‘Confidential Witness’ Recants”

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.

More on “Circle of Greed”

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.

The Milberg Weiss Four after prison

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.”

October 10 roundup

Target of Milberg suit sues over Torkelsen testimony

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).

Milberg hires judge who ruled in its favor

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”.

Bernard Madoff and Milberg Weiss, cont’d

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.

Mel Weiss invested with Madoff

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.

Arrest of NYC litigator Marc Dreier (bumped and updated)

[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.]

Microblog 2008-11-04

  • Quoting normally Republican friend, early in day: “Already have buyer’s remorse and he hasn’t even won yet.” [@asymmetricinfo] #
  • “Milk. Allergy warning: Contains milk” [Flickr; h/t @petewarden] #
  • Deer-vehicle collision at Connecticut & M, one of downtown D.C.’s busiest intersections? [Wood, ShopFloor] #
  • Milberg case, highest-profile law firm prosecution ever, finally winds up; 11 convictions, $100 million givebacks [WSJ law blog] #
  • Even expecting to disagree w/ many of his policies, it’s a great day when America can elect a black president [Megan McArdle] #