NYT Columnist Raps Lerach’s ‘Brazen’ Article Defending Kickbacks
A New York Times business columnist says an article by a former securities class action lawyer serving time for paying kickbacks is “a brazen, shameful piece of work.”
“Some guys just don’t know when to shut up,” writes columnist Joe Nocera. “William S. Lerach is one of those guys.”
Lerach was sentenced to two years in prison after pleading guilty in the kickback scheme. He wrote in an article for Portfolio that prosecutors and judges wield so much power that defendants feel compelled to plead guilty.
“Like a nonconformist during China’s Cultural Revolution, a defendant in a federal criminal case is forced to bow and humbly express guilt, regret and contrition,” Lerach writes. “You speak only to affirm your guilt and sorrow. If I hadn’t pleaded guilty, the judge could have sentenced me to seven years instead of the 24 months I now face.”
Lerach writes that his former firm, now known as Milberg, gave lead plaintiffs part of its attorney fees—and it didn’t diminish money for other shareholder plaintiffs. He also says paying lead plaintiffs was an industry practice before 1995, when a new law barred the practice.
“What a crock,” responds Nocera. He says payment of the fees, which helped the Milberg firm get to the courthouse first and become the lead law firm in class actions, created a conflict of interest for lead plaintiffs. These plaintiffs would care more about attorney fees than a fair settlement, he says.
Nocera also says other securities lawyers deny that such kickbacks were widespread. And a lawyer who helped write the 1995 law, Robert Giuffra Jr. of Sullivan & Cromwell, contends such payments were always illegal but the new legislation made it more explicit.
Lerach’s article is “a brazen, shameful piece of work—and it must infuriate the prosecutors who made the plea agreement with him, and the judge who accepted it,” Nocera writes, “especially since Mr. Lerach wrote his own remorseful letter to the judge ahead of his sentencing.”
A hat tip to How Appealing.
