12 June 2008

Melvyn Weiss sentenced

The sentencing of Melvyn I. Weiss and Bill Lerach, arguably America’s most famous securities lawyers formerly of the firm Milberg Weiss, a plaintiffs’ law firm, for upto 30 months appears excessive. Under sentencing guidelines, 18 months was the minimum though. The offence of the ‘convicts’ was sharing of fees with clients – to enable the law firm to act as lead counsels in class action law suits. “These payouts allowed the firm to quickly file suits and become lead counsel, prosecutors allege, entitling Milberg to a large share of the fees: some $250 million over more than two decades.” The firm was indicted in 2006 for sharing upto 11 million dollars with clients and is likely to pay $ 75 million to settle the charges. In a country where clients are allowed to share their bounty with lawyers, penalizing lawyers for sharing their bounty with clients appears illogical. The firm has changed its name from Milberg Weiss to Milberg LLP and disassociated itself from its erstwhile prima donna.

Amongst those who supported a light sentence are Judge Stanley Sporkin, former Director of Enforcement of the Securities and Exchange Commission (SEC) and former celebrated SEC Chairman Arthur Levitt. 

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