Posted on 01/25/2002 7:27:51 PM PST by Defiant
Newspaper says Milberg Weiss is grand jury target
By Michael Kinsman
January 25, 2002
Milberg Weiss, the nation's most aggressive proponent of shareholder lawsuits, is a target of a federal grand jury investigation over the solicitation of investors and fabrication of shareholders for class-action securities suits, according to a Los Angeles legal newspaper.
The secret Los Angeles grand jury investigation centers on Milberg Weiss but could include other law firms, the Los Angeles Daily Journal reported.
The U.S. Attorney's Office in Los Angeles has issued subpoenas to a wide range of individuals, including workers at large stock brokerages who are being asked to testify about providing Milberg Weiss with names of investors, according to the report.
The newspaper quoted unnamed sources in its story.
Officials at Milberg Weiss offices in San Diego and San Francisco did not respond to interview requests yesterday.
Based in New York, the firm Milberg Weiss Bershad Hynes & Lerach maintains a large San Diego office, which Bill Lerach, the chief architect of shareholder class-action suits, uses as his base of operations.
Most recently, Lerach has been involved in a high-profile battle to win status for Milberg Weiss as the lead law firm for shareholder suits against Enron, the fallen energy company.
Milberg Weiss represents five large institutional investors, and designation as lead counsel could be worth tens of millions of dollars to the firm.
The allegations that Milberg Weiss might have solicited investors to front lawsuits came as a surprise to Chuck Dick, an attorney for Baker & McKenzie in San Diego who has defended companies against Milberg Weiss suits for 15 years.
"All of this strikes me as being very curious," Dick said. "It doesn't jibe with the Milberg Weiss I know."
Dick, who has represented San Diego companies such as Imperial Corp. of America, Great American Savings and Home Federal Savings in securities class actions, praised Milberg Weiss for its professional approach.
Milberg Weiss filed 85 percent of all securities class-action suits in California last year, according to San Francisco insurance broker Woodruff-Sawyer. It also was responsible for 60 percent of all securities cases filed in other states.
The law firm contends it has recovered more than $20 billion for investors in shareholder suits. Many of its cases end in negotiated settlements. It currently has suits pending against 300 companies, including Amazon.com, Apple Computer, Cisco Systems and Intel.
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