Prominent New York Securities Firm Receives 20-Count Indictment

This story is really bad and exemplifies greed run amok.  The New York law firm of Milberg Weiss Bershad & Shulman yesterday received a 20-count indictment for allegedly paying illegal kickbacks to plaintiffs in class action lawsuits.  Here is an excerpt of the story provided courtesy of The New York Times:

The securities class-action law firm of Milberg Weiss Bershad & Schulman was charged today with several criminal counts, including obstructing justice, perjury, bribery and fraud.

The 20-count indictment, handed up by a federal grand jury in Los Angeles, represents the most prominent confrontation between the government and a law firm in years. While federal regulators won multimillion-dollar settlement from big corporate law firms over their role in the savings and loan scandals, no major law firm has faced a criminal indictment in recent memory.

Milberg Weiss has been the dominant law firm in winning multimillion-dollar lawsuits against huge corporations on behalf of shareholders who claimed they were wronged. Its success was so great that Congress raised the legal hurdle for winning such lawsuits in the 1990’s.

Today, the firm was accused of secretly paying kickbacks, beginning in 1981 and continuing through 2005, to plaintiffs in class-action lawsuits. While the indictment does not prevent the firm from practicing law, it is expected to have a huge impact on its business.

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