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After Indictment, Milberg Weiss Shrinks

What happens to a prominent law firm when it is indicted on federal criminal charges? Milberg Weiss Bershad & Schulman provides a case in point. Since its indictment May 18 for allegedly paying kickbacks to plaintiffs, the class action securities firm has lost lawyers, lost clients, closed offices and filed fewer cases, according to a report by Reuters this week.

Although the firm has pleaded not guilty to the charges, it has dropped from 125 lawyers to 75 since the indictment. It has closed its Wilmington, Del., office and plans to shut its Boca Raton, Fla., office next month, Reuters says. The report continues:

"Milberg Weiss is also losing choice assignments. A federal judge in Manhattan last month replaced it as lead counsel in a case against Bayer AG involving cholesterol drug Baycol after the named plaintiff, the New York State Common Retirement Fund, said it would not employ the firm.

"In June, a federal judge in Minnesota cited the indictment in removing Milberg Weiss as lead counsel in a case against Medtronic Inc., which makes heart defibrillators."

Bruce Carton, vice president of Securities Class Action Services, told Reuters, "Judges have to consider how long the firm will be around. No one can say at this point whether Milberg will survive this."

Posted by Robert J. Ambrogi on August 8, 2006 at 01:18 PM | Permalink | Comments (0)

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