Legal News

As Lerach reports to prison, Sen. Cornyn introduces bill on attorney accountability

By Jason Siegel

Class action attorney William Lerach reported to a low-security federal prison camp in Lompoc, Calif. yesterday.

Lerach will serve a two-year prison term over the illegal kickback scheme at his former firm, Reuters reported.

The 500-inmate facility is 175 miles northwest of Los Angeles.  The American Lawyer wrote earlier this month about what Bill Lerach, Dickie Scruggs and Mel Weiss can expect in prison (here).

Sen. John Cornyn (R-Texas) timed the introduction of one of his bills, the Securities Litigation Attorney Accountability and Transparency Act, to coincide with Lerach's arrival in prison.

Cornyn claims the bill would promote transparency and court oversight in selecting and paying class counsel in securities class action litigation, specifically on back-door arrangements between lead plaintiffs and class counsel and lead plaintiffs entering fee agreements that pay the lawyers more than the market rate, according to a press release.

Senate Bill 3003 would require sworn certifications from lead plaintiffs and their attorneys disclosing if the attorney paid (or promised to pay) the plaintiff, legally represented the plaintiff, gave campaign contributions to an elected official who could retain counsel for the plaintiff, or any other conflicts of interest, according to the press release.

The bill also requires courts to use a competitive bidding process for approving the lead class counsel, soliciting bids so that fees are based on market rates. It would also try to determine the average hourly rate for lead counsel by pay for a study of the last 5 years of fee awards in securities class actions.

Full post as published by Legal Pad | LA on May 20, 2008 (boomark / email).