lawrocket 3 #1 June 3, 2008 Everybody's heard of "class action lawsuits." Many have also heard of "derivative lawsuits." For those who are unfamiliar with the latter, it's where a stockholder sues the board of directors and officers of a corporation when stocks of a publically traded corporation fall, and accuses the directors and officers of some form of malfeasance. Fundamentally, every time the stock price drops for a corporation, there are plaintiffs' lawyers with big money who files a class action derivative suit. Among these attorneys was a single king - Milberg Weiss Bershad & Schulman. There are typically a several law firms who move in on class actions - they are, after all, big money. But for some reason, Millberg Weiss was consistently getting their suits filed first. That meant they were lead counsel - and got a bigger share of the fee award. They've collected, what, 65 or 70 BILLION dollars over the last 20 years - and kept $250 million of it. As with many people, most of these companies who are defendants would rather settle than take it to court - litigation would take years and cost tens of millions to defend - per case. How was this firm able to find a willing plaintiff to sue to corporation within hours of a stock dropping? It turns out, they had, shall we say, professional plaintiffs. The law firm had some plaintiffs that they gave a little extra incentive to - an incentive that is substantially more than the law allows. The lead plaintiff in a case is supposed to receive no more than the other class members. Millberg had a few of them, who were lead plaintiffs in numerous cases against different companies. One - Seymour Lazar - was indicted in 2005. One of the partners at Millberg was Bill Lerach - a California attorney left Millberg in 2004 and opened his own office in San Diego. He was somewhat of a local legend - everybody knew him and opinion was usually that of a highly hateful respect for him. Most attorneys despised what he was doing, but, they respected his abilities as a litigator. It's kinda like the respect one would have for Al Capone - despicable, but damned good at what he did. And especially in Silicon Valley, corporations HATED him. The Feds, however, began investigating. Lerach was the first big dog to fall. Back in February, he was sentenced to two years in prison for his role, plus $250k in fines. In court, he read a statement. "I knew what I was doing was wrong," he said. His voice quavered as he continued. "My conduct was completely and absolutely unacceptable from anyone, and especially a lawyer." The other partners in the firm? Schulman and Bershad pled guilty before Lerach did. Weiss? He got sentenced yesterday to two years and $250k in fines and $9.7 million in forfeitures. Another attorney and the firm itself are still facing criminal charges. The only name on the firm now? Millberg. Good fucking riddance. I think this is 10 or 20 years too late. Even a 1995 law that required class action attorneys to wait 60 days before filing, and granted lead plaintiff status to the largest staked plaintiffs - not just the first - did little to quell the overzealousness. Good companies with naturally volatile markets, like technology, etc., faced lawsuit after lawsuit whenever the stocks took an unexpected dip. There was a case a few years ago where the judge dismissed a Millberg plaintiff when the stock fell BECAUSE he dumped a load of stocks at short prices. He caused the stocks to drop, and then was lead plaintiff in a derivative case. These attorneys deserve to rot. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
kelpdiver 2 #2 June 3, 2008 QuoteOne of the partners at Millberg was Bill Lerach - a California attorney left Millberg in 2004 and opened his own office in San Diego. He was somewhat of a local legend - everybody knew him and opinion was usually that of a highly hateful respect for him. Most attorneys despised what he was doing, but, they respected his abilities as a litigator. It's kinda like the respect one would have for Al Capone - despicable, but damned good at what he did. Capone provided people with booze. Lerach provided nothing. 2 years may be suitable, but 250k is one nuisance lawsuit against a startup. We should be putting Milken type fines (1B$) on these guys. Quote Share this post Link to post Share on other sites
riddler 0 #3 June 4, 2008 More and more, it just doesn't make sense for an American company to go public. It used to be an easy way to get rich and stamp out the competition. These days, it's open season for frivolous lawsuits and loads of government regulation.Trapped on the surface of a sphere. XKCD Quote Share this post Link to post Share on other sites
georgerussia 0 #4 June 5, 2008 Quote More and more, it just doesn't make sense for an American company to go public.... ...in USA. They now go public in England or in Europe.* Don't pray for me if you wanna help - just send me a check. * Quote Share this post Link to post Share on other sites
Snowwhite 0 #5 June 5, 2008 There was a local lawsuit going on where a Chicago atty was representing a guy who was suing various governmental entities 3 hours away from Chicago. Several years into the lawsuit it became apparent that the guy was going to lose the lawsuits, but he wouldn't let it drop and just go away. He kept hoping that one of the entities would settle to get rid of him. His atty asked the judge to be let out of the representation of this client, and the judge commented something to the effect "you took this job on when you thought you were going to be made rich, you have to continue to represent your client, even though it's not going to make you rich" Eventually the lawyer went bankrupt, and the client lost the cases he had filed. TOO BAD!! More of these scum suckers need to be treated this way.skydiveTaylorville.org freefallbeth@yahoo.com Quote Share this post Link to post Share on other sites
