Since its founding in 1965, Milberg Weiss has struck the fear of God in corporate America. Its specialty was representing "wronged" investors in massive class actions. The firm was masterful not only at finding plaintiffs for these cases, but also in convincing defendants to settle for ungodly sums of money. Nobody is running scared anymore.
On Sept. 20 federal prosecutors indicted Melvyn Weiss, the firm's co-founder, for allegedly paying people to serve as lead plaintiffs in class action suits. The scheme reportedly made the company about $250 million in fees.
Weiss, a high roller at casinos who collects Picassos, rejected a plea bargain. His former partner, William Lerach, did not. Lerach entered a plea agreement in September in which he admits participating in the scheme.
"Much of the impact on Milberg Weiss was general fallout not just for the firm but for lead plaintiffs represented by the firm in [ongoing] cases," says Jill Fisch, a professor of business law at Fordham University.