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Securities Lawyer Lerach Is Set to Plead Guilty
By Nathan Koppel
The Wall Street Journal
Tuesday, September 18, 2007


Noted securities lawyer William Lerach is set to plead guilty to one count of conspiracy in the criminal case involving his former law firm, now called Milberg Weiss LLP.  A plea agreement calling for a one- to two-year prison term could be announced as soon as today, according to people familiar with the investigation.

The case, brought last year in federal court in Los Angeles, alleges Milberg Weiss paid $11.3 million in improper kickbacks to clients.  Two now-former partners of the firm were indicted at the time.  Mr. Lerach, as well as his former colleague Melvyn Weiss, have been under investigation but haven't been charged.

Mr. Lerach once led the field of securities class actions, in which investors who suffer losses typically claim executives misled them about a company's financial condition.  The lawyer became a lightning rod for critics who claim plaintiffs securities lawyers flood a company with papers until it agrees to a settlement, regardless of the merits of the claim.  Mr. Lerach, 61 years old, has defended the suits as a way to keep corporate America accountable.

The plea deal doesn't involve Mr. Lerach cooperating with the government in its investigation, people familiar with the matter say.  The deal also calls for him to pay an $8 million fine, according to a person familiar with the matter.  The government also will release Mr. Lerach's firm of the past few years, Coughlin Stoia Geller Rudman & Robbins LLP, from the risk of criminal charges, said a person familiar with the case.  Mr. Lerach retired from the firm last month.

Mr. Lerach's attorney didn't return a call for comment.

Another former Milberg Weiss partner, David Bershad, pleaded guilty earlier this year and agreed to cooperate with the investigation.  Milberg Weiss and another former partner, Steven Schulman, are fighting charges.

Write to Nathan Koppel at nathan.koppel@wsj.com

http://online.wsj.com/article/SB119007337737630513.html?mod=hps_us_whats_news