Posted Jul 09, 2007 09:03 pm CDT
Updated: A former partner at securities class-action firm Milberg Weiss & Bershad has agreed to plead guilty to conspiracy and cooperate with a probe into whether the firm paid kickbacks to clients, the Wall Street Journal reports (sub. req.).
David Bershad will be the first Milberg attorney to plead guilty in the case. He had been indicted for allegedly paying lead plaintiffs in securities class-action suits with money stashed in a safe in his office. (The Wall Street Journal had earlier indicated he may cooperate; see this ABAJournal.com post for details.)
A press release says Bershad will acknowledge that he and others concealed the secret payment arrangements from judges in state and federal courts. He will forfeit $7.75 million and pay a $250,000 fine. The plea carries a maximum penalty of up to five years in prison.
Also indicted in the case are ex-partner Steven Schulman and the law firm itself. Both have pleaded not guilty.
A statement of facts accompanying Bershad’s agreement says the secret payments began in the 1970s and continued through 2005. It contends Bershad, Schulman and five other unnamed Milberg partners conspired to secretly kick back payments generally amounting to 10 percent of attorney fees to name plaintiffs.
“Such payment arrangements generally enabled Milberg Weiss to file more class actions and to file them more quickly than would be possible absent such arrangements,” the statement read. That in turn enhanced the law firm’s ability to obtain lead counsel status, it said.
Originally posted on 07-09-2007 at 12:39 PM.