<<His firm, Milberg Weiss Bershad Hynes & Lerach, accounts for about half of all shareholder suits against corporations and has won $6 billion for its clients. >>
Excerpt from:
In a class of his own
Jan 17th 2002
From The Economist print edition
How Melvyn Weiss, a class-action lawyer, finds crimes that pay
From over 1,000 cases, around $30 billion has been recovered from targets including Charles Keating's savings and loan empire, Drexel Burnham Lambert, Washington Public Power Supply Systems, Met Life, Prudential and various banks trading on Nasdaq. Between 1988 and 1998, Mr Weiss personally earned more than $100m, according to the National Law Journal.
Who wins?
Is society better off because of Mr Weiss? Many people have been compensated for being cheated. Corporate governance has probably been improved by a fear of lawsuits. Mr Weiss even sees himself as an ally of auditors, by providing them with an excuse to be tough on their clients. “I have always believed the auditing profession needed a strong whip over their head so it does not look like they were over-eager in pushing their clients to be honest,” he says.
Conversely, in 1999 Milberg Weiss paid $50m to settle an abuse-of-process case in which Mr Weiss admitted telling Daniel Fischel, an expert witness who helped defendants to use economics to prevail over Milberg Weiss, that “I will destroy you” (Mr Weiss says his comments were taken out of context). And an entire class of costly insurance covering executives and directors has emerged in response to Weiss-inspired lawsuits, as well as reams of meaningless legalese attached to products.
Shareholder suits, in particular, seem a dubious remedy, because they do no more than transfer money from a vehicle the shareholders already own back to themselves—minus large legal fees—resulting in a large net loss to the shareholders. Only a very talented lawyer could argue that America is better off for that. |
