Steven G. Schulman, a partner at New York law firm Milberg Weiss Bershad & Schulman, resigned, eight months after he and the firm were indicted for giving kickbacks to clients in exchange for filing complaints against companies.
Schulman, 55, was charged in May along with partner David Bershad, 67, and the firm in a 20-count indictment alleging mail fraud and conspiracy. The U.S. claimed they gave three clients a total of $11 million for allowing Milberg to represent them in securities fraud litigation against publicly traded companies.
“Both as a former member of the law firm and as an individual, I will vigorously fight the indictments,” said Schulman, who has been on leave since the indictment, in a statement. He will leave Jan. 1, according to Sam Singer, a spokesman for Schulman.
The two lawyers and the firm, which is renaming itself Milberg Weiss & Bershad, pleaded not guilty in Los Angeles federal court in July. Since the indictment, the firm has steadily lost lawyers and clients to rivals. This week, it lost a key decision in a multibillion dollar lawsuit claiming rigged initial stock offerings of technology companies in the 1990s.
Milberg led the group action against 12 securities firms. On Dec. 5, a U.S. appeals court in New York refused to unify some of the fraud claims as a class-action. The ruling means millions of investors who lost money must individually pursue the banks, making it far more difficult to press their claims or force a settlement.