The Examiner newspaper’s new Sunday edition has a package on William Lerach, the trial lawyer extraordinaire now imprisoned for the Milberg Weiss class-action fraud.
- How the mighty Lerach has fallen: Power lawyer to prisoner
- Lerach in short form (timeline)
- Nate Beeler caricature
Perhaps the most important story is the one that makes it clear that class-action lawsuits — in this case, ginned-up, conspiratorial class-action lawsuits — impose major costs on businesses and investors.
One of Lerach’s biggest paydays will come as he sits in the federal penitentiary when he collects his ample portion of the $688 million in attorneys’ fees in $7.2 billion settlements with banks he sued in the Enron scandal.
But Texas Attorney General Greg Abbott, who earlier had supported Lerach’s legal claims in the Enron cases, has since challenged the $688 million, arguing that such generosity would be a “windfall” for Lerach and other lawyers.
The Enron settlement demonstrates how class-action securities plaintiffs lawyers can walk away with millions, while the shareholders they represent get only a few dollars per share they own.
Lerach, for example, won a $5 million settlement against Seagate Technologies. The $5 million was split among 17,000 Seagate shareholders, or about $294 per shareholder, compared with Lerach’s fees of approximately $1.5 million.
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