Charges against a wealthy California investor accused of taking kickbacks to file shareholder lawsuits show that federal prosecutors really want to go after securities law firm Milberg Weiss and its principals, the investor’s lawyer said on Monday.
In a statement on Monday, the firm said that the fees it had paid were part of a “common and accepted practice in class-action cases.”
The firm, which dominated U.S. securities law in recent years, said the payments it made had been disclosed in tax forms and that firm lawyers had testified before the U.S. Congress over such fees.
An indictment unsealed on Thursday in Los Angeles accused retired lawyer Seymour Lazar of taking $2.4 million in illegal payments for acting as a plaintiff or recruiting family members to serve as plaintiffs in 50 securities cases for the firm over 20 years.
The indictment against Lazar and his longtime attorney, Paul Selzer, accused “a New York law firm” of hiding the payments to Lazar by “laundering” them through other law firms, including Selzer’s firm.
Milberg Weiss, which has acknowledged that it is the firm described in the indictment, has challenged the charges as “baseless.”