PointofLaw.com
 Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  
   
 
   

 

 

Will Milberg Weiss Become the 'Enron' of the Plaintiffs' Bar?



Over the weekend, the Wall Street Journal carried an editorial making the case that the possible indictment of the firm, or some of its partners, for illegal kickbacks made to one of its frequent plaintiffs would become the "Enron" of the plaintiffs' bar. (Past coverage here).

For many reasons the comparison is not apt. The Enron story, so far as it is known, involved corporate managers manipulating accounting records to inflate the company's revenues. The Seymour Lazar/Milberg Weiss story, so far as it has been reported, involves allegations of kickbacks from the firm to one of its clients. The former situation involved fraudulent conduct, intended to bilk public markets, the latter allegedly involves wrongful conduct intended to manipulate the justice system.

One parallel between the cases that commentators have not yet discussed is the problem of ensuring just behavior when participants believe they can get "easy money". The culpable parties at Enron believed they could make easy money through a stock market Ponzi scheme where their manipulated earnings resulted in a climbing stock price. The allegations in the Lazar/Milberg Weiss case are that the plaintiffs' attorneys believed they could get quick settlements, netting them easy contingent fees, if only they could capture the role of lead counsel through a pliable named plaintiff.

The real scandal in the Lazar/Milberg Weiss situation is that our civil justice system has countenanced this "easy money" attitude amongst officers of the court.

If the public response to Enron was the Sarbanes-Oxley Act, the public response to this latest scandal should be to eliminate the causes of "easy money" litigation.

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.