Milberg Weiss Held Talks On Settling Criminal Case
By Nathan Koppel
The Wall Street Journal
Friday, June 1, 2007
Law firm Milberg Weiss & Bershad LLP held talks
this week with federal prosecutors about settling a criminal
case that alleges the firm made improper kickbacks to
class-action clients, according to two people familiar with the
The development comes as prosecutors are in plea negotiations
with Milberg partner David Bershad. Prosecutors have also
engaged in recent settlement talks with William Lerach, a former
Milberg partner who has been scrutinized by the government but
hasn't been charged with wrongdoing, says a person familiar with
the case. It wasn't clear how recent the talks were. This
person said a "global" settlement was possible that would
include additional defendants.
On Wednesday, Milberg partners had a meeting at the U.S.
attorney's office in Los Angeles to discuss terms of a possible
deal, which could be finalized within "weeks," the two people
say. Some of the terms discussed, according to a person briefed
on the meeting, included Milberg's paying a fine and agreeing to
increased oversight of its business practices.
Milberg Weiss was indicted in May 2006, along with Mr. Bershad
and Steven Schulman, a former partner who has since resigned.
Mr. Bershad is on a leave of absence from the firm. The
20-count indictment against the firm alleges that Milberg paid
more than $11.3 million in illegal kickbacks to clients in more
than 150 class-action and shareholder derivative actions.
Though prosecutors have looked at what role Melvyn Weiss, head
of the firm, may have played in the alleged kickbacks, he hasn't
been charged. "It's unclear how [the settlement talks] would
impact Mel," a person familiar with the discussion said.
This week, the Washington Post and Fortune reported that Mr.
Lerach had told clients he was leaving his law firm, Lerach
Coughlin Stoia Geller Rudman & Robbins LLP. Neither Mr. Lerach
nor his firm have confirmed or denied the reports.
Messrs. Weiss and Lerach, and Mr. Lerach's attorney, didn't
return calls to comment. Lawyers for Milberg Weiss and Mr.
Weiss didn't respond to a request to comment, and a spokeswoman
for the firm declined to comment.
After Wednesday's meeting, Milberg partners yesterday morning
held a meeting at Milberg's New York office, conveying that a
settlement deal, if finalized, would allow the firm to remain in
business, according to a person familiar with the firm.
--Peter Lattman contributed to this article.
Write to Nathan Koppel at