The U. S. Justice Department is looking at possible new indictments in the kickback investigation of powerhouse plaintiff firm Milberg Weiss Bershad & Schulman. (Apr. 7)
Here’s a telling sentence:
David Bershad, partner Steven Schulman (are) being looked at in connection with payments to Howard Vogel, a real estate broker and former lead plaintiff in several Milberg class actions.
Mr. Vogel must be prone to bad luck, eh?
Now the shareholder lawyers are piling on: class-actioneers Milberg Weiss and Stull, Stull & Brody would like to represent “people who owned Take-Two shares between Oct. 25, 2004, the launch of ‘Grand Theft Auto: San Andreas,’ and Jan. 27, 2006, the day that Los Angeles’ city attorney sued Take-Two for selling pornographic video games to children.” (“More legal woes for ‘Grand Theft Auto’ maker”, Reuters, Feb. 15). Earlier coverage: Jan. 28, Jul. 27, etc.
Lyle Roberts’s excellent The 10b-5 Daily now has some competition in the securities-law blog arena from the other side of the aisle. Bruce Carton of Institutional Shareholder Services offers the Securities Litigation Watch and Milberg Weiss attorney Christopher Jones offers the PSLRA Nugget.
L.A. Times and Law.com’s Recorder both bring word from inside the investigation (Myron Levin and Molly Selvin, “1995 Suit May Be Focus in Milberg Weiss Probe”, Los Angeles Times, Nov. 17; Justin Scheck, “Complexity Slows Milberg-Lerach Probe”, The Recorder, Oct. 31). See Oct. 10 and links from there, Nov. 5, PoL Nov. 13, etc.
Josh Gerstein of the New York Sun has details (“Class-Action Expert Pleads Guilty”, Nov. 4). The plea agreement, on charges unrelated to his class-action expert witness testimony, “does not contain any language requiring Torkelsen to cooperate with the inquiry” into Milberg Weiss, reported earlier (see Oct. 10).
John Torkelsen, once described by Fortune as “the damages expert of choice for the entire plaintiffs side of the securities bar”, is “expected to plead guilty to reporting false information to a government agency in a D.C. federal court Oct. 21.” The charge arises from Torkelsen’s actions in handling a venture capital fund, rather than from his courtroom work. Before now, however, Torkelsen has declined to cooperate with prosecutors, and a change in that posture could give new impetus to the ongoing federal investigation of the law firm of Milberg Weiss Bershad Hynes & Lerach, for whom Torkelsen was a “notoriously effective expert witness … in dozens of securities suits throughout the 1990s,” according to sources interviewed by Law.com. (Justin Scheck, “Charge Against Expert May Spur Probe of Milberg Weiss”, The Recorder, Oct. 10).
For more on Torkelsen and the venture capital controversy, see Barbara Fox, “Unraveling the Torkelsen Case”, U.S. 1, May 7, 2003. Peter Elkind’s Sept. 4, 2000 expose for Fortune (“The King of Pain is Hurting“) reported:
Torkelsen’s calculations of shareholder losses routinely supported the hundreds of millions of dollars Lerach sought — and he was fabulous in front of a jury should a company decide to fight….Over more than 20 years, Torkelsen’s firm, Princeton Venture Research, not only had made tens of millions working for Lerach’s firm Milberg — by far its biggest client — but also had become the damages expert of choice for the entire plaintiffs side of the securities bar….
He sent thousand-dollar gift baskets as baby presents, and he invited his many friends in the plaintiffs’ bar to an annual black-tie Christmas party that was mind-boggling in its extravagance. At one, guests arriving in Torkelsen-provided stretch limos were heralded by buglers and greeted by costumed Disney characters. Entertainment was invariably provided by a big-name act: Little Richard one year, Aretha Franklin another.
For more on the Milberg probe, see Jun. 27, Jun. 28, Aug. 29, Point of Law Aug. 8, etc. On the reliability of Torkelsen’s numbers as submitted to courts, see the Delaware Chancery Court’s memorandum (PDF) in Cinerama v. Technicolor (2004), a non-Milberg case, pp. 10 et seq.
Tom Kirkendall, and Professors Ribstein, Bainbridge, and Henning on the prospect of charges against unindicted alleged co-conspirator Milberg Weiss (Jun. 27).
Following a three-year federal probe (see Jan. 28-29, 2002), a grand jury in Los Angeles has indicted retired Palm Springs entertainment lawyer Seymour Lazar, 78, on charges that he collected millions in kickbacks from attorneys in exchange for acting as a plaintiff in dozens of class-action lawsuits. Milberg Weiss, the law firm that represented Lazar, was not named in the indictment; it said it was “outraged” at the “baseless” implications that its lawyers had acted improperly. Mr. Lazar’s lawyer, Thomas H. Bienert, described his client as a “crusader for consumer advocacy”. (John M. Broder, “Ex-Lawyer Is Indicted on Kickbacks in Lawsuits”, New York Times, Jun. 25; Reuters/L.A. Times; Washington Post; Law.com/The Recorder; W$J).
…and the kind of coverage they get in the New York Times, discussed on Point Of Law this morning.