Legal News

More Terms Emerge on Milberg?s Expected Non-Pros Agreement

By Dan Slater

We’ve got some more details, Loyal LB’ers, in the closely-watched Milberg non-prosecution agreement, which, reported Nathan Koppel in Saturday’s WSJ, could be announced as early as next week.

Milberg was indicted in 2006 for allegedly paying more than $11 million in kickbacks to clients in exchange for their serving as lead plaintiffs in securities class actions. Four of its former partners, including Bill Lerach and Mel Weiss, have already pleaded guilty in connection with the kickback scheme.

As reported, the firm will cough up $75 million by 2012 (or sooner, depending on how the firm’s biz goes), but won’t plead guilty to any offenses — “a victory of sorts,” writes Koppel, “since a guilty plea to felony charges could have forced the firm out of business.” While the firm will admit that it paid improper kickbacks to clients and made improper cash payments to stockbrokers to refer clients to the firm, the non-prosecution agreement, according to a source, says that current partners at the firm weren’t involved in misconduct.

Milberg will also admit that it made inflated fee payments to John Torkelson, a former expert witness on damages, who was used by Milberg in many cases. In another settlement term, Milberg is expected to agree to have attorney Bart Schwartz monitor its cases for two years to ensure that it doesn’t engage in prohibited conduct. For a certain period of time the government can resuscitate the case if Milberg participates in prohibited conduct.

Full post as published by Law Blog - WSJ.com on June 16, 2008 (boomark / email).