Firm: Melvyn Weiss Faces Charges
Updated: A founding partner of one of the nation’s most powerful plaintiffs securities law firms is reportedly resigning from a management role in the face of expected new federal charges against both him and the firm in an ongoing case concerning alleged payments of illegal kickbacks to clients.
Melvyn Weiss “has decided to discontinue his participation in firm management in order to focus on the defense of the charges against him,” his firm, New York City-based Milberg Weiss, reports in a Web site statement. “Milberg Weiss understands,” the statement says, “that a second superseding indictment will be issued tomorrow that will include new charges against the firm and also Melvyn Weiss.”
Until now, Weiss has not been charged in the ongoing case, although the firm—in a highly unusual and controversial prosecution tactic—has previously been indicted. (The case is detailed in a December 2006 ABA Journal cover story.)
As discussed in an earlier ABAJournal.com post, both Weiss and William Lerach, who formerly headed the firm’s West Coast operations before forming a new firm, reportedly rejected plea deals approximately three months ago. However, Lerach agreed to a plea earlier this week that calls for prison time, as an earlier ABAJournal.com post today discusses.
Commenting on Lerach’s plea, professor John Coffee of Columbia Law School characterized it as the fall of a titan. “Bill Lerach did not invent the securities class-action lawsuit,” Coffee told the San Diego Union-Tribune. “But he converted it from being an irritant and a nuisance to public corporations to being a major threat.”
“The firm remains proud of Mr. Weiss’ and the Firm’s accomplishments over the years and will continue to fight for its clients and class members and to produce the excellent results for which it is known,” the Milberg Weiss Web site statement concludes. “We do not anticipate any interruption in our work and we look forward to putting this difficult period behind us.”
(Hat tip: Wall Street Journal Law Blog.)
Updated at 6:41 p.m. CDT.
