Milberg Plea Deal Includes Admission of Stockbroker Payments
Under a plea deal expected to be announced this week, the securities class action law firm Milberg will acknowledge wrongdoing in at least three areas but won’t plead guilty to any offenses, enabling it to continue operating.
The Wall Street Journal (sub. req.) quotes an anonymous person briefed on the nonprosecution agreement who says the firm will admit that it paid improper kickbacks to lead plaintiffs without pleading guilty. The firm will also admit paying stockbrokers to refer clients to the firm and paying inflated fees to an expert witness on damages.
The plea deal, reported earlier, calls on the firm to pay a $75 million fine. The Wall Street Journal story says a lawyer will also be appointed to monitor its conduct for two years.
The expert witness is identified as John Torkelsen, who pleaded guilty earlier this year in connection with receiving such payments, the Wall Street Journal says.
The story refers to a 2007 court filing in which a broker claimed a Milberg partner passed him packages of hundred-dollar bills underneath a table at a restaurant. State and federal laws to discourage the filing of unmeritorious lawsuits ban such fees.
Another person familiar with the agreement told the newspaper the deal will specify that none of the current partners at Milberg was involved in wrongdoing.
The Wall Street Journal says the Justice Department still has to sign off on the deal.
