Results matching “milberg”

January 8, 2008 - PointOfLaw Forum the scheduled start date for the Milberg Weiss trial. Which could keep it on the agenda in time for the elections. There could also be new charges that Milberg Weiss faked costs for expert work, which would almost certainly resonate better with the jury than an arcane theory of kickbacks that the defendants will be able to muddy with for-hire experts who would testify that the kickbacks were realy referral fees that theoretically did not hurt anyone. [W$J, LA Times, NY Times]

In Twombly v. Bell Atlantic, Milberg Weiss filed an antitrust class action against several telecommunications companies, alleging an antitrust conspiracy. In the district court, the defendants got the case dismissed on the grounds that the complaint did not make specific allegations demonstrating conspiracy. The Second Circuit reversed, noting that Fed. R. Civ. Proc. 8 does not require such specific allegations.

For some reason, the Supreme Court has granted certiorari, though they have addressed precisely this issue twice in recent years, albeit not in the antitrust circumstance.

Petitioners are correct that the Second Circuit's decision is horrible public policy: bare-bones antitrust complaints permit hugely expensive fishing expeditions with no consequences to the plaintiffs who bring the case, as numerous amicus briefs point out. But the respondents are correct that this counterproductive result is precisely what Rule 8 commands. The problem here is with the law, not with the court decisions. This is not a place for the Supreme Court to intervene as judges—but the Supreme Court can fix the problem with the rules under their authority granted to it by Congress under 28 U.S.C. �2072, and Congress can also step in.

I briefly touched upon this issue at Point of Law a year ago.

Update: Howard Bashman has a roundup of links, including to the oral argument transcript.

Judge: Tell how you became Milberg plaintiffs - PointOfLaw Forum

In Chicago, presiding over the settlement of a class action against Boeing, Cook County Circuit Judge Nancy Arnold has ordered a number of plaintiffs, all holders of small numbers of Boeing shares, to disclose how it was that they came to be clients of Milberg Weiss. The Chicago Tribune (reg) has details (via Peter Lattman, whose colleague Nathan Koppel also covers a "slugfest" in Newark between Milberg Weiss and rival Bernstein Litowitz over representation of shareholders in a suit against Merck; colorful comments on that one).

Fortune and Sebok on Milberg Weiss - PointOfLaw Forum

Peter Elkind, known for his writing on Enron, turns his journalism on "The fall of America's meanest law firm," Milberg Weiss, in the Nov. 3 issue of Fortune magazine.

Anthony Sebok's Findlaw column discusses the Milberg Weiss indictment and the Fortune article, though perhaps cuts the firm too much slack; for example, it's certainly not the case that "critics had no real concrete gripe to voice against the firm - until the indictment." The Oxford Health litigation that Sebok singles out reflects parasitic free-riding off of SEC efforts unnecessary to vindicate real shareholder interests; and when such free-riding wasn't occurring, it was because Milberg Weiss was often suing over legitimate drops in stock price and using the threat of litigation to extort settlements, again to the detriment of shareholders. For this, the firm received over a billion dollars of shareholder money in the course of its securities litigating.

Rep. Baker (R-La.) on the election - PointOfLaw Featured Discussion

"I just never thought I�d live to see the day when liberals would, as they have with relation to the markets, so openly advocate more taxation, more regulation, and more litigation, and, with a straight face, argue that most Americans would find this to be an attractive prescription for their financial well-being." Also:

Frivolous lawsuits are undeniably and unnecessarily raising the costs of doing business in America, and frightening off investors. I am convinced that common-sense securities-litigation class-action reform is not only a necessary component for safeguarding our global competitiveness, but that it also will cut the costs for plaintiffs in legitimate suits without diminishing the quality of representation. And while it is encouraging to see New York�s Democratic Sen. Chuck Schumer write in the Wall Street Journal this week that �it may be time to revisit the best way to reduce frivolous lawsuits without eliminating meritorious ones,� I would be more confident in the prospect of bipartisan collaboration on this effort were it not for the hundreds of millions of dollars in campaign contributions the Democrats reap from these firms � Milberg Weiss among them.

Ben Stein: no shame, or no memory? - PointOfLaw Forum

On Oct. 19 we quoted Bruce Carton as predicting a "barrage of deafeningly loud disapproval from the plaintiffs' bar and consumer groups" over the Paulson Committee's proposals for curtailing securities suits. Right on schedule, we heard in Sunday's Times from the most comic expert witness in Milberg Weiss's stable, wearing his "Times columnist" hat. If you're still clutching your sides in helpless laughter over this from Seth Mnookin, Larry Ribstein can restore some perspective (here, too).

The pity is that in the hermetic world of the Times Sunday Business section, they probably imagine that running Ben Stein somehow gives them a claim to balance, since he channels the views of the plaintiff's securities class-action bar from a "conservative" point of view, while other writers there do so from a more conventional liberal point of view. (See also Ted, below.)

Did the PSLRA help shareholders? - PointOfLaw Forum

That's certainly what the data suggests in Professor Michael Perino's paper "Institutional Activism through Litigation: An Empirical Analysis of Public Pension Fund Participation in Securities Class Actions."

In the Private Securities Litigation Reform Act of 1995, Congress created the lead plaintiff provision in the hope that institutions would closely monitor class counsel and thereby curb the agency costs that typically plague securities class actions. This paper uses a random sample of 627 pre- and post-PSLRA settlements to examine the efficacy of this provision. Specifically, the paper analyzes whether there is any correlation between the participation of one kind of institutional investor, public pension funds, and settlement outcomes, attorney effort, or attorneys' fee requests or awards. The paper finds that cases with public pension lead plaintiffs have larger settlements, recover a greater percentage of the stakes at issue in the case, have greater attorney effort, and have lower fee requests and awards than cases with other types of lead plaintiffs. These findings suggest that public pensions do in fact act as effective monitors of class counsel.

Of additional interest to our readers: auctions substantially reduce fees, ceteris paribus, and, even controlling for the different client mix and case mix it had, Milberg Weiss's fee requests are statistically significantly higher than those of other firms, which is a data point supporting the idea that they financially benefited from the alleged kickback scheme described in the government's indictment of them.

Milberg "radioactive" - PointOfLaw Forum

Like Arthur Andersen before it, the firm is finding it hard to wriggle out of its ethical difficulties by merging with a less troubled firm.

Fastow's sentence - PointOfLaw Forum

Tom Kirkendall notes the difference between Andy Fastow's (and the Enron Task Force's) representations to the Lay/Skilling jury and to the sentencing judge. Peter Lattman notes that Milberg Weiss's Bill Lerach lobbied for a lighter sentence in exchange for Fastow's testimony against peripheral deep pockets in the Enron civil trials. Speaking of peripheral parties, Fastow, who directly profited from frauds committed at Enron and was central to the entire endeavour of whatever wrongdoing there was, received the same six-year sentence as bystander Jamie Olis.

More Milberg indictments? - PointOfLaw Forum

Check back in two months, say Dow Jones/WSJ sources.

Pat Hynes leaving Milberg Weiss - PointOfLaw Forum

Patricia Hynes, one of the most respected litigators at the Milberg Weiss firm (and a former name partner there), is jumping ship for the British firm Allen & Overy. The New York Law Journal has the full story here.

Milberg Weiss "nearing iceberg" - PointOfLaw Forum

That's the New York Observer's assessment of the indicted class-action firm's course these days. Even hiring a bunch of high-profile legal academics -- Burt Neuborne, Arthur Miller, Samuel Issacharoff -- hasn't done the trick. (Neuborne tells the Observer that the lawprofs are "advising on how to keep the firm 'delivering high-quality services.'� Oh, so that explains it.) The WSJ Law Blog has another update here, to go with the ones back in June here, here and here.

Milberg Weiss update - PointOfLaw Forum

The firm is down to 75 attorneys (from 125) and has closed two offices since its indictment, and has not announced any new class actions, according to an August 4 Reuters report. It has pled not guilty.

Peacocks in the barnyard - PointOfLaw Forum

Los Angeles Times reporter Molly Selvin wanted my opinion of class-actioneer Bill Lerach for this profile, so I gave it. Holding up the other end of the discussion are Lerach fans Jamie Court, of Harvey Rosenfield's outfit, and actor/humorist/ expert-economic-witness-in-Milberg-cases Ben Stein ("Unsettling Days for King of Class Actions", Jul. 23)(cross-posted from Overlawyered).

Milberg disclosure - PointOfLaw Forum

Much more of it could be on the way if an Indiana judge's order prevails.

Milberg partners plead not guilty - PointOfLaw Forum

Milberg indictment vs. Andersen indictment - PointOfLaw Forum

The same Jack Coffee article in the National Law Journal that we quoted last week has the following analysis of the similarities and differences between the indictment of Arthur Andersen and that of Milberg Weiss:

Clearly, professional services firms -- law or accounting -- are fragile. Both clients and then partners may flee to competitors if the firm becomes stigmatized. Already, this process has begun at Milberg, as some clients and partners have departed. But does this mean a law firm should not be indicted? Here, the contrasts with the Arthur Andersen case are more striking than the parallels. Only one relatively low-ranking partner at Andersen, a firm with many thousands of employees, was charged with ordering the destruction of documents. The entire episode lasted only a few days, and no involvement by senior management was alleged. The public injury from Andersen's demise was also self-evident becuase it reduced an already concentrated industry to the current Final Four.

In contrast, the Milberg Weiss indictment alleges a conspiracy extending from 1981 through 2005, during which the defendants "agreed to and did secretly pay kickbacks to named plaintiffs in class actions and shareholder derivative actions in which Milberg Weiss served as counsel." Kickbacks were alleged to have been made over this period with regard to approximately 180 lawsuits to three professional plaintiffs and their relatives. Also unlike the Andersen case, the highest-ranking partners of Milberg Weiss were either indicted or described in coded terms in the indictment that suggest the government is still actively seeking their indictment. Finally, dominant as Milberg Weiss has been in securities class action litigation, the barriers to entry are much lower in the case of plaintiffs' litigation than in the case of global accounting, and the firm is not irreplaceable.

Hearings on H.R. 5491 - PointOfLaw Forum

Back on June 28th our own Ted Frank testified in hearings before the Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee of the House Financial Services Committee on H.R. 5491. At the time, he noted that the bill had received little media attention.

That seems to be changing, as popular pundit Robert Novak noted over the weeked the partisan fireworks that erupted at that hearing when the Democratic members (Barney Frank and Paul Kanjorski) tried to move the hearing into executive session in order to keep the debate out of the public spotlight.

H.R. 5491 would change the law governing securities class action litigation by (a) creating a quasi-loser-pays rule in which a prevailing defendant's attorneys' fees could be shifted to the plaintiffs' counsel if the plaintiff's position was not "substantially justified", (b) requiring plaintiffs and their attorneys to sign conflicts-of-interest disclosures that could lead to the disqualification of some plaintiffs' counsel and (c) authorizing courts to impose a competitive bidding process for the selection of lead plaintiffs' counsel.

One can only guess why Frank and Kanjorski would want to stifle a public debate on this subject. As Novak noted, in recent years, Milberg Weiss donated $2.78 million to Democratic candidates and $22,000 to Republicans.

Perhaps Ted's persuasive testimony was the kindling that sparked the firestorm.

California Judge Vaughn Walker's also spoke in support of the bill, but Duke Law professor James Cox voiced a contrary opinion.

John C. Coffee, Jr., on Milberg case - PointOfLaw Forum

The prominent Columbia corporate law professor has a good column on the indictment in the Jun. 19 National Law Journal, unfortunately not online. A couple of snippets:

Of course, all defendants are entitled to a presumption of innocence. The defense of Milberg Weiss and its partners is that they only paid referral fees to other law firms or lawyers and did not know that the referral fees were being passed through to the clients. This issue is for the jury to decide, but defense counsel had best be prepared to answer one obvious question: Does a law firm need to pay referral fees to another law firm 70 or more times to obtain the same plaintiff over and over? Could it not have simply asked its client, after the first several cases, if it could contact him directly about future cases? If he refuses, the issue of willful blindness begins to surface....

Many have long wondered as to what could motivate anyone with no real financial stake to be deposed in hundreds of cases, and the current indictment will suggest to some that under-the-table payments have long been customary. Indeed, professional plaintiffs appear to have maintained broad and inclusive stock portfolios with trivial holdings that were designed to give their law firms immediate access to court. One does not logically do this for free.

Does the KPMG case help Milberg Weiss? - PointOfLaw Forum

That's what the law firm appears to claim about the KPMG case in a press release reported by Peter Lattman. But other than the words "Thompson Memo," there are no similarities.

  • The concern in Stein was that the DOJ actually forced KPMG to withhold attorneys' fees for its employees. But KPMG did cave; Milberg Weiss didn't. And its charged "employees" are multi-millionaire partners capable of affording competent counsel, removing any concern of inadequate representation.
  • KPMG was risking indictment for behavior of a small portion of the firm. But the indicted Milberg Weiss partners are name partners with 33% ownership of the firm—and if "Partner A", identified by many to be Mel Weiss, is also indicted, one is talking about a majority of the shares being implicated. This isn't a case of a corporation being forced to choose between throwing its low-level employees overboard and being irresponsible to its shareholders; here, the shareholders are the alleged wrongdoers, and the alleged wrongdoing is alleged to be part of the Milberg Weiss business model.
  • There's more than just Milberg Weiss's refusal to implicate its partners behind its being charged. The investigation started in 1999; subpoenas went out in 2003; Milberg Weiss was allegedly engaging kickbacks through 2005; and didn't hire its well-publicized compliance officer until shortly before the May 2006 indictment.

For more, see my recent Congressional testimony, which reviewed the Milberg Weiss indictment in the course of discussing the pending H.R. 5491 and the need for more measures to prevent kickbacks and improper relationships between lead plaintiffs and plaintiffs' counsel.

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