Firm: Melvyn Weiss Expects Federal Indictment Today
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An attorney who has spent decades at the helm one of the nation’s most successful class action law firms, Melvyn Weiss of Milberg Weiss LLP, expects to be indicted today by a federal grand jury in Los Angeles, his firm said. “Milberg Weiss understands that a second superseding indictment will be issued tomorrow that will include new charges against the Firm and also Melvyn Weiss,” the firm said in a statement yesterday. “Mr. Weiss has decided to discontinue his participation in Firm management in order to focus on the defense of the charges against him.”
The announcement came on the heels of a decision by Mr. Weiss’s longtime partner, William Lerach, to submit a guilty plea to a felony conspiracy charge in connection with the federal investigation into alleged secret payments from Milberg Weiss to investors who helped the firm file securities cases.
A former Milberg Weiss partner who was indicted last year along with the firm, Steven Schulman, is likely to enter a guilty plea today, the Wall Street Journal and Fortune magazine reported on their Web sites. Another former name partner at the firm, David Bershad, pleaded guilty in July.
An attorney for Mr. Weiss, Benjamin Brafman, and a lawyer for Mr. Schulman, Herbert Stern, did not respond to phone messages last night seeking comment for this article.
Legal analysts said the series of plea deals signaled a seven-year-long federal probe hurtling toward a virtually inevitable conclusion, the indictment of Mr. Weiss. Weeks ago, prosecutors told defense lawyers in the case that a revised indictment was likely before a court hearing set for tomorrow. Mr. Weiss, 72, faces a daunting array of potentially incriminating witnesses, including individuals who have admitted receiving secret payouts from the firm, several lawyers who worked at the firm, a firm consultant, and, in all likelihood, attorneys who served as intermediaries for the firm’s payments. Mr. Lerach has not agreed to cooperate with prosecutors, but Bershad, who served as the firm’s financial manager, has agreed to testify if called. It is unclear whether Mr. Schulman’s plea will require him to testify.
The string of guilty pleas cast doubt on the future of Milberg Weiss, which is based in Manhattan and at one time boasted of filing half of all the securities lawsuits in America. To serve as class counsel in securities and consumer class action suits, the firm needs the approval of judges, who may be wary of appointing a firm that, according to several former partners, housed a conspiracy to obstruct justice.
Milberg Weiss’s statement yesterday suggested that it planned to soldier on. “The Firm remains proud of Mr. Weiss’s and the Firm’s accomplishments over the years and will continue to fight for its clients and class members and to produce the excellent results for which it is known. We do not anticipate any interruption in our work and we look forward to putting this difficult period behind us,” the statement said.