This persistant undoing of the regulations and supervision which were enacted early
last century to promote competition in the market place by restricting collusion between companies to inflate their commodities,
by supervising banks to secure deposits, by supervising reports of earnings so as to promote confidence in the stock market. In a myriad of other way our federal and state governments interfered in the market
place to limit the ways in which companies could make a profit. There is a natural tendency for companies to maximize profits
and their directors to dig deep into the finances of their companies. There are
of course those (the Mike Millikans and Ken Lays of business) who oppose such regulation.
Starting with Reagan there has been an undoing of these regulations (witness Reagan’s deregulation of the S&Ls,
which cost our economy $500 billion). No President in the last century has so
openly joined with the robber barons (a pejorative phrase that was in common usage
until the after WWII). Moreover, there is legislative support for enactments
that promote the interests of the robber barons.
U.S. Attorney’s office since Enron “has increasingly relied upon non-prosecution deal –also called deferred
prosecution agreement—in many criminal cases involving business entities.” At http://www.law.com/jsp/article.jsp?id=1147696533676.
indictment of Milberg-Weiss, May 18th, sends a message to law firms about the risk of themselves facing federal
investigation and indictment for bring corporate fraud cases to the courts. It
came after a 5-year investigation for alleged misuse of referral fees. “Milberg Weiss, the country's premier plaintiff law firm, vigorously
pursues corporate wrongdoing. In 40 years, we have successfully prosecuted thousands of class action lawsuits and recovered
over $45 billion for shareholders and consumers. Our reputation for excellence has been recognized and applauded by judges
all over the country. “ at http://www.milbergweissjustice.com/index.php The prosecution will very likely force the closing of our
country’s primer law firm in the area of corporate wrongdoings.
an effort to address the government's concerns about alleged misuse of referral fees, Milberg Weiss voluntarily adopted a
system to ensure that no outside firm or attorney receiving a referral fee from Milberg Weiss would share any portion with
a client. Milberg Weiss also retained the services of Bart M. Schwartz, a highly respected former Chief of the Criminal Division
in the office of the U.S. Attorney for the Southern District of New York, to monitor the procedures and to develop a "best
practices" program. The firm offered to have Mr. Schwartz report his ongoing efforts directly to federal prosecutors in Los Angeles. In addition, as previously reported, partners David Bershad and Steven
Schulman have taken leaves of absence pending resolution of the charges filed against them, not because they believe they
engaged in wrongdoing, but because they hoped doing so would avoid indictment of the firm. Indictment of the firm was completely
unnecessary and unjust.
The government's case depends on its position that the firm and its attorneys failed to provide
full and "honest services" in prosecuting cases in furtherance of its clients' interests. That charge is absurd on its face.
The firm is renowned for achieving the best possible results for its clients and class members. In fact, the government makes
no allegation - nor could it - that the firm did not provide first rate, highest quality legal services to every one of its
The firm is committed to continuing the zealous representation of its clients and has the attorneys, personnel,
and resources to do so.” At http://www.milbergweissjustice.com/ourstatements.php The case is about the alleged misuse of “referral
fees,” paid to other, smaller firms that brought cases to Milberg Weiss. The
issue that will be before the courts is the legality of having paid plaintiffs, which made sure that the firm was often first
to bring a claim on behalf of shareholders. Howard Vogel and Steven Cooperman,
two of those plaintiffs as part of his cooperation with prosecutors, plead guilty in April of receiving $2.5 million for serving
as Milberg-Weiss plaintiffs. Part of the charges concern the alleged paying of
over $2.4 million to Palm Springs attorneys Lazar and Seltzer and others since 1984 in exchange for being named as plaintiffs in class action
lawsuits. This fee for service is not a kickback, though it has been commonly
called such by the pro-business press and the U.S. Attorney’s Office. This
farming out of services is a normal business practice and ought not be prosecuted. However,
our government all too often has other agendas besides serving and protecting the public.
With Milberg-Weiss it is protecting the companies that cook their books and commit security fraud.
practice of paying for services in brining about a class-action suit is wide spread. In terms of settlement in the last year,
Milberg-Weiss ranked 4th, however, they were the lead firm that went after Enron in 2003. Given Bush & Cheney’s close ties to Enron, the prosecution of Milberg-Weiss can be viewed as
a form of payback.
the books has become so wide spread since deregulation that in 2001, over 1,000 firms had to issue revised financial reports
to the SEC—among them were Enron, Tyco, and World Com. In the 80s the SEC
reviewed all filing; by 2001 due to staff cuts they review just 8% of those filings.
Now the leading law firm protecting share holders will very likely be silenced by government prosecution for a business
a sound practice, that of paying other law firms for bring them cases. The text
of the indictment is to be found at http://www.law.com/pdf/ca/milberg_indictment.pdf The heart of the issue is that racked up as legal fees,
which reduce plaintiffs share of successful suits, included the funds given those who help bring the case to Milberg-Weiss. The pro-business press reports these fees for services as criminal and urge tort reform. However, such reform, given the performance of Bush and Congress will only serve to
protect big business from share-holder suits.