Judge Approves Deal Letting Melvyn Weiss Keep Future Fees
Posted Aug 27, 2008 7:07 AM CST
By Debra Cassens Weiss
A New York judge has approved a deal that allows former securities class action lawyer Melvyn Weiss to keep future fees from some cases he worked on at his former law firm, now known as Milberg.
Weiss pleaded guilty to paying kickbacks to lead plaintiffs in securities lawsuits and is set to go to prison on Thursday, Portfolio.com reports.
Justice Herman Cahn acknowledged that law firms are generally prohibited from sharing fees with nonlawyers, but said they are allowed to pay a disbarred or suspended lawyer for the value of his or her work, the story says. Weiss will not be compensated for matters that are the subject of the prosecution, though.
The Wall Street Journal has criticized the deal, saying Weiss stands to make tens of millions in fees under the agreement. The amount could more than make up for the $9.75 million Weiss agreed to forfeit in his plea deal with the government.
Federal prosecutors were aware of the deal, Cahn’s opinion says. The agreement does not prevent the Milberg firm from pursuing a lawsuit seeking money from Weiss toward the $75 million that it agreed to pay in its own deal with the government.