NEW YORK (Reuters) – William Lerach, a prominent U.S. class-action lawyer, reported to a low-security prison in California on Monday to begin serving a two-year term after admitting he participated in an illegal kickbacks scheme at his former law firm….[snip]Lerach was ordered to serve two years in prison by a federal judge in Los Angeles in February. He also agreed to forfeit $7.75 million and pay a $250,000 fine as part of a plea agreement.
Lerach admitted he played a role in a scheme to seek out clients with big stock portfolios, ask them to be plaintiffs when negative information surfaced about a company and then secretly pay them a portion of the legal fees the firm received.
And from the office of Sen. John Cornyn (R-TX), a news release, “Cornyn Introduces Bill To Strengthen Transparency & Accountability In Securities Class-Action Litigation.”
WASHINGTON—With one of the country’s former leading class-action litigators, Bill Lerach, reporting to federal prison this afternoon for participating in a $250 million illegal kickback scheme, U.S. Sen. John Cornyn, a member of the Senate Judiciary Committee, announced today that he is introducing new legislation to address what many believe to be a widespread criminal practice in the area of securities class action law.
“As recent events have shown, current securities litigation laws have been subject to abuse, and there is reason to believe this criminal activity may not be limited to just a few bad actors,” Sen. Cornyn, a leading advocate of lawsuit abuse reform, said today. “It is important that corporations be held accountable through securities fraud litigation when they cheat ordinary shareholders out of their hard-earned money. But it is equally important that attorneys be held accountable when they do the same thing. The recent securities litigation kickback scandals ought to spur Congress to action.”
The bill is S. 3033.
Cornyn’s bill deserves hearing just as much as does Rep. Boehner’s request for oversight of Milberg Weiss. Odds would be against either, we’d guess.
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