Milberg Law Firm Close to Plea Deal; $75M Under Discussion
The securities class-action firm now known simply as Milberg is close to a deal with prosecutors that would resolve charges it paid more than $11 million in kickbacks to lead plaintiffs in securities class actions, the Wall Street Journal reports (sub. req.).
The story, quoting two unnamed sources, says negotiations “have zeroed in on a payout in the neighborhood of $75 million,” a figure that would make the deal one of the largest criminal penalties for a law firm. Last year Jenkens & Gilchrist agreed to pay $76 million to end a probe into marketing of abusive tax shelters in Chicago.
The news comes as Melvyn Weiss, the co-founder of the firm, is scheduled to be sentenced today. His plea agreement for his role in the conspiracy calls for a sentence of up to 33 months in prison and $10 million in fines and penalties. His lawyer has asked the court for a sentence of only 18 months in prison.
The story says Milberg has asked a law firm created by its former partner William Lerach—Coughlin Stoia Geller Rudman & Robbins—to help pay the settlement in the case, but it has refused. Coughlin Stoia has not been charged. Lerach was sentenced to two years in prison for his role in the kickback conspiracy while a lawyer at Milberg.
