OT: I'm not sure whether to cheer the imminent indictment of the firm that appears to be most often mentioned in Class Action abuse; or, bemoan the fact that Gov't prosecutors are using the threat of indictment to extract privileged communications from that firm.
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Milberg Weiss Set to Be Indicted
By JOHN R. WILKE in Washington, PEG BRICKLEY in Wilmington, Del., and PHYLLIS PLITCH in New York
May 18, 2006 11:31 a.m.
An indictment of class-action firm Milberg Weiss Bershad & Schulman LLP is expected later today, according to lawyers familiar with the matter.
The U.S. Attorney's office in Los Angeles has scheduled a press conference to announce "an indictment expected to be returned today by a federal grand jury," without giving more information. The conference is scheduled for 12:15 p.m. local time, or 3:15 EDT.
The move comes after federal prosecutors stepped up pressure on the firm, demanding that the big class-action firm waive attorney-client privilege and turn over internal documents to avoid indictment in the government's investigation of alleged client kickbacks in securities suits.
A federal grand jury in Los Angeles has been hearing evidence in the six-year-old case and is poised to indict two of its partners, David Bershad and Steven Schulman.
The two left the firm last week and are preparing to fight possible criminal charges. But an indictment of the firm itself was still seen as likely.
Milberg and federal prosecutors have discussed in recent weeks a deferred-prosecution agreement that would avoid an indictment of the firm, lawyers close to the case said. Terms included a court-appointed monitor, an admission of responsibility and a fine of about $40 million, these people said. But the government and the firm have been unable to agree on a waiver of attorney-client privilege, and the issue appears to threaten a possible deal. A Justice Department spokesman declined to comment yesterday.
There are new signs that the continuing threat of indictment is already hurting the firm's business. A judge on Delaware's influential corporate-law tribunal, citing the chance Milberg could be indicted, said yesterday that he is reluctant to keep the firm in the lucrative lead-counsel slot in a class-action case.
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