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White-Collar Crime

Milberg Plea: Feds Will Drop Charges, Law Firm Will Pay $75M

Posted Jun 16, 2008 6:51 PM CDT
By Martha Neil

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A plea deal has been agreed to between the government and the Milberg plaintiffs securities firm.

The feds will drop the charges against Milberg, which was indicted along with several senior partners for allegedly participating in an illegal scheme to funnel secret kickbacks to lead plaintiffs in class actions. And Milberg, in exchange, will ante up $75 million, reports the Wall Street Journal (sub. req.).

A plea deal involving a $75 million payment had been widely anticipated, and is expected to involve acknowledgements of wrongdoing by the firm, as reported in earlier ABAJournal.com posts.

"The firm risked having to pay forfeitures and penalties of many hundreds of millions of dollars if the criminal case against the firm had gone forward," says Sanford Dumain, a member of Milberg's executive committee, in a written statement reported by the newspaper. "We wanted to avoid that enormous risk, which we faced solely because of the misconduct of certain of our partners who are no longer with the firm."

Additional coverage:

Wall Street Journal Law Blog: "More Terms Emerge on Milberg’s Expected Non-Pros Agreement"

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