Chastened Milberg Firm in Plea Negotiations
After a plea agreement and an apology last week by Milberg Weiss founding partner Melvyn Weiss over a scheme to pay millions of dollars in secret kickbacks to lead plaintiffs in securities class actions, the once-defiant tone of the defendant New York law firm has changed dramatically in the still-ongoing case.
Although the once-pre-eminent plaintiff securities firm, now known simply as Milberg LLP, itself was charged in the case and has yet to reach a resolution, all of the former firm partners named as defendants, who included four former name partners, have now pleaded out. In fact, “the latest developments have prompted a grim joke among insiders in the case: that if Larry Milberg were still alive, the firm might now be reduced to the name of ‘LLP,’ ” Fortune reports.
The Milberg name has been preserved for the firm, Fortune says, because Milberg—although he also “participated in the illegal scheme, joining Weiss and other top partners in ponying up cash for the secret payments,” according to Fortune—is beyond the reach of the law. He died in 1989.
Meanwhile, the Milberg firm has removed a website from the Internet that formerly was devoted to blasting the prosecution case, and has issued a statement of regret. In it, partner Sanford Dumain, a member of Milberg’s executive committee, “expressed the firm’s ‘deep disappointment’ at the revelation of Weiss’ misconduct, explaining that it had ‘previously believed our former leaders’ assurances of their innocence,’ ” recounts Fortune.
The firm is now in plea negotiations with the prosecution, Fortune reports.
The firm has seen a “dramatic exodus of attorneys” because of the case, according to the magazine, which says Milberg now has about 70 lawyers (66 are presently listed on its website, by an ABAJournal.com count). At the time of its indictment in May 2006, the firm had 128 lawyers, according to an earlier ABA Journal cover story. However, most of those who left did so in the five months immediately after the indictment in May 2006.
Earlier coverage:
ABAJournal.com: “Melvyn Weiss to Plead Guilty; His Ex-Firm Changes Its Name”
ABAJournal.com: “US: Milberg Weiss Firm Was ‘Racketeering Enterprise’ “
ABA Journal: “Milberg Weiss on the Hot Seat”
