Milberg (formerly known as Milberg Weiss) is close to settling with federal prosecutors over its alleged $11 million kickbacks to people who became lead plaintiffs in its class-action lawsuits against companies, the WSJ reports on page one.
The Journal notes its been a disgraceful year for trial lawyers, with Dickie Scruggs of Mississippi pleading guilty to criminal conspiracy for bribing a judge in a Katrina-related insurance lawsuit. He faces five years in prison.
Milberg’s fall has been a blow to the U.S. plaintiff’s bar. It is rare for any law firm to face criminal charges, especially one as powerful as Milberg. Led at one time by Melvyn Weiss and William Lerach, the firm pioneered the lucrative business of securities class-action lawsuits. After a dramatic drop in a company’s share price, the law firm typically would file suit on behalf of shareholders claiming the company misled investors about its financial health. The firm has helped win huge settlements against accounting firms, tech companies and many high-profile corporations embroiled in scandal, including Enron Corp. and Tyco International Ltd.
Corporate executives long have complained that the suits were designed primarily to enrich lawyers. The Milberg case has given a boost to that view, prompting some in Congress to call for tighter regulation of securities class-action suits.
No guaranteed income for these folks
USA Today takes a look on its Money front at what it says are the increasing number of workers who make “variable pay”—basically those based on commissions.
It says one in five workers, not including those who own their own businesses, are paid based on sales or tips and that the economic downturn is hitting them hard. They’re part of the hidden costs of the slide, with effects that won’t show up in stats immediately.
You won’t find these people reflected in the latest job figures. Nor do the unemployment figures include people, such as most sales clerks, whose hours have been cut because consumer spending is down. Or the small-business owners whose sales have plummeted. Though they’ve not suffered as much as workers who have lost jobs, these people have seen their living standards fall, with far-reaching consequences for themselves and the overall economy.