Deep Capture Podcast: Episode 2
This episode includes clips of Patrick Byrne’s recent interview on the Terry Gilberg radio talk show, in addition to a brief look at the role of stock message board “bashers” in the manipulation process. This, in turn, leads to an interesting look at shocking irony surrounding the recent destruction of Bear Stearns at the hands of illegal naked short selling hedge funds.
You can learn more about contract stock message board basher Yolanda Holtzee here.
Finally, rock star attorney Wes Christian comments on this week’s filing of a lawsuit by shareholders of Taser International against several broker-dealers thought to be complicit in the long-running manipulation of Taser’s stock.
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Theme music for the Deep Capture Podcast composed by Derek K. Miller.
Posted in Deep Capture Podcast |
June 2nd, 2008 at 4:35 pm
Milberg Weiss top gun sentenced
Law firm co-founder Melvyn Weiss, 72, is sentenced to 30 months in prison; firm accused of paying kickbacks, amassing fortune.
LOS ANGELES (AP) — Melvyn Weiss, the co-founder of a law firm known for securities class-action suits, was sentenced Monday to 30 months in prison for his role in a lucrative lawsuit kickback scheme targeting some of the largest corporations in the nation.
U.S. District Judge John F. Walter also ordered Weiss, 72, to pay $9.7 million in forfeitures and $250,000 in fines.
In a prepared, handwritten statement read before sentencing, Weiss apologized for his “wrongful conduct” and described the case as a fall from grace.
“I promise you my contrition is profound and genuine,” he said.
Guilty plea: Weiss pleaded guilty to a racketeering conspiracy charge in April as part of an agreement with prosecutors.
Contending that Weiss had orchestrated the scheme, prosecutors had asked for a 33-month sentence. Weiss and his attorneys had sought a reduced sentence, citing his age and contributions inside and outside courtrooms.
Authorities said the law firm made about $250 million over two decades by filing legal actions on behalf of professional plaintiffs who received $11.3 million in kickbacks.
The firm dominated the industry in securities class-action lawsuits, which involve shareholders who claim they suffered losses because executives misled them about a company’s financial condition.
The kickback scheme allowed attorneys at the firm once known as Milberg Weiss to be among the first to file litigation and secure the lucrative position as lead plaintiffs’ counsel, according to court documents.
The lawsuits targeted companies such as AT&T Inc. (ATT), Lucent (ALU), WorldCom, Microsoft Corp. (MSFT, Fortune 500) and Prudential Insurance (PRU, Fortune 500).
A seven-year investigation has resulted in guilty pleas by three of Weiss’ former partners.
William Lerach recently began serving a two-year prison sentence after pleading guilty to one count of conspiracy to obstruct justice and make false statements.
Steven Schulman pleaded guilty to a racketeering conspiracy charge, and David Bershad pleaded guilty to conspiracy. Both are scheduled to be sentenced later this year.
Two defendants remain in the case - the firm itself, now known as Milberg LLP, and attorney Paul T. Selzer. Trials for those defendants are scheduled in August.
Settlement: The Wall Street Journal, citing anonymous sources, reported Monday that the law firm and federal prosecutors were close to reaching a settlement in which the firm would pay $75 million in fines and penalties. Prosecutors declined to comment.
Judge Walter called the kickback scheme “extremely serious” because attorneys such as Weiss had not disclosed to judges handling class-action cases that the lead plaintiffs were paid for their involvement.
“It further shakes the public’s confidence in our system,” Walter said.
Assistant U.S. Attorney Douglas Axel contended the maximum 33-month prison term was appropriate because Weiss never came to authorities after learning his firm was being investigated.
“This defendant was right in the thick of the conspiracy,” Axel said.
Calls for leniency: Attorney Benjamin Brafman, who represents Weiss, argued for leniency before his client was sentenced.
Weiss was a legend in the legal community who had received about 275 supportive letters in recent weeks, including two from retired federal judges, Brafman said. Walter noted he had never seen such an outpouring of support for a defendant.
“We came here expecting a 33-month sentence, and we are pleased the court recognized the extraordinary life of Mr. Weiss,” Brafman said after the hearing. “Mr. Weiss will do his sentence.”
Weiss was ordered to begin serving his time by Aug. 28.
“Mr. Weiss’ trip to federal prison is just the latest sad chapter in a series of scandals where high-flying trial lawyers have abused plaintiffs, investors and the legal system,” said U.S. Sen. John Cornyn, R-Texas, a member of the Senate Judiciary Committee who sponsored new legislation to reform securities class-action law.
First Published: June 2, 2008: 3:23 PM EDT
Mortal blow to a once-mighty firm