In Denver, CO "veteran criminal defense attorney Gary Lozow of Isaacson Rosenbaum has stipulated to a public censure issued by the disciplinary office of the Colorado Supreme Court for acting as an intermediary in law firm Milberg Weiss' plaintiff kickback scheme" as reported by Matt Masich for Law Week Colorado.
In May 2006 and September 2007 the plaintiffs' class action firm -- in an incarnation known as Milberg Weiss Bershad & Schulman, LLP -- and several of its partners were indicted on federal charges for an alleged decades-long conspiracy pursuant to which serial plaintiffs were paid kickbacks to file securities fraud suits against publicly-traded companies. Some heavy-weight former partners, including Mel Weiss and Bill Lerach, pleaded guilty and were imprisoned for their roles in the scheme, and the firm -- once dubbed the "meanest law firm" in America -- avoided prosecution by paying a $75 million fine and hiring a compliance monitor.
Speaking on the intregity of the remaining partners at the firm -- now practicing by the moniker Milberg LLP -- partner Ariana Tadler previously stated: "The lawyers that stayed were not implicated or involved in the indictment, and we are going to work just as aggressively as we always have to do the best for our clients." And yet notwithstanding their innocence the question still begged is whether some of those remaining partners had suspicions about the scheme prior to the indictment and what, if any, steps they took to address the problem. Indeed, Bill Lerach recently said that his conduct was an "industry practice." After all, what did everyone think was happening when the same individuals repeatedly were serving as plaintiffs in dozens of lawsuits? In 1995, Congress enacted the Private Securities Litigation Reform Act specifically for the purpose of curbing the abuses for which Milberg Weiss and several of its partners were indicted, and surely this legislation raised a red flag even among the innocents at the firm.
Milberg LLP has made the news a couple of times in recent weeks. U.S. District Judge Robert P. Patterson Jr. sanctioned the firm and its co-counsel pursuant to Rule 11 with a public reprimand after allegations from two "confidential sources" in a lawsuit against Sony Corporation subsequently were not supported by the witnesses' deposition testimony, and U.S. District Judge Richard M. Berman rebuked the firm in a ruling on its request for additional attorneys' fees in the securities fraud case In re Nortel Networks Corp. Securities Litigation because of, among other issues, improper staffing.