This Wall Street Journal ($) article reports that federal investigators have turned up the pressure in its investigation of several prominent plaintiffs class action securities lawyers at the former Milberg, Weiss law firm, including granting immunity to a former Milberg Weiss lawyer who worked closely with William S. Lerach, who has already been fingered as a target of the investigation. Here are the prior posts on the investigation and related matters pertaining to the firms involved.

The long investigation (at least four years) is focused on whether Milberg Weiss arranged to have undisclosed payments made to individuals whose names the firms repeatedly used as “name” plaintiff in securities class-action lawsuits. Payments to name plaintiffs in such lawsuits are generally subject to approval by the courts overseeing the cases to minimize the inherent conflict-of-interet that exists between the individual’s desire for compensation and the interests of the rest of the class.
Interestingly, Alan Schulman, the former Milberg, Weiss partner who is now apparently cooperating with investigators under the immunity grant, left the firm in 2000 and opened the San Diego office of Bernstein Litowitz Berger & Grossmann LLP (known as “BLB&G”). BLB&G, Milberg, and Mr. Lerach’s new firm regularly compete for lead counsel status in plaintiffs class action securities fraud cases. Mr. Lerach’s firm — which is the lead law firm for the plaintiffs in the big Enron securities fraud class action — recently announced a settlement that put the aggregate settlements in the Enron class action over the previous record that BLB&G helped establish as lead counsel in the WorldCom securities fraud class action. The fact that BLB&G could benefit from an indictment against Milberg or its former partners by having less competition for lead counsel status in future class action lawsuits casts a troubling light on Mr. Schulman’s immunity deal and related testimony.
Meanwhile, this LA Times article reports on the testimony in the divorce case of Stephen Cooperman, the former Beverly Hills eye surgeon who has served up testimony against Milberg Weiss as a means by which to obtain a lighter sentence for his 2001 conviction in an insurance scam. Mr. Cooperman, served as name plaintiff in about 60 class action cases that Milberg Weiss handled, has admitted engaging in several fraudulent schemes and likely will not be a credible witness against Milberg, Weiss.