Class action legend Melvyn Weiss last week (20 March) agreed to plead guilty to a federal racketeering charge over his participation in a scheme to pay kickbacks to lead plaintiffs in shareholder suits.
The plea agreement recommends a sentence of between 18 and 33 months in prison for Weiss, 72. He also has agreed to pay $10m (£4.93m) in fines and forfeited fees.
Weiss was the last major figure indicted in a probe by the Los Angeles US Attorney's Office into the payment of kickbacks by the New York-based firm known until last week afternoon as Milberg Weiss.
Three former name partners of the firm – William Lerach, David Bershad and Steven Schulman – have already agreed guilty pleas. The firm, which will now operate as Milberg, remains under indictment.
The plea agreement means the near-certain disbarment of Weiss, who was admitted to practise in
In a statement, Weiss said: "I deeply regret my conduct and apologise to all those who have been affected, including all of the wonderful and extremely talented lawyers and other employees of the firm, none of whom had any involvement in any wrongdoing.
“I believe it is very important to preserve this unique legal resource for the benefit of victims of wrongdoing affecting the masses, who historically have been underserved in so many ways."
Only a few years ago, Milberg Weiss was the dominant firm when it came to securities fraud class actions and Weiss and Lerach were two of the nation's best-known plaintiffs lawyers. Lerach famously carried boxes of documents into the courtroom to file a shareholder suit following the 2001 bankruptcy of Enron and the firm has been involved in several other high-profile class actions.
Prosecutors claim the Milberg partners earned $250m (£123.2m) in legal fees on cases where plaintiffs were paid.
A sentencing date will be set for Weiss after he formally enters his plea some time in the next few weeks. In a statement, prosecutors said they would ask Walter to impose a 33-month sentence.
Lerach is the only former Milberg partner to have been sentenced so far, having last month received two years in prison and being ordered to repay fees worth nearly $8m (£3.94m).
News of the plea deal comes with securities class action filings set to rise after a few lean years, with plaintiff lawyers eyeing the fire-sale last week of stricken investment bank Bear Stearns to former rival JP Morgan Chase.
A longer version of this article appears in the New York Law Journal, a US sister title of Legal Week.
