Former class action securities plaintiffs’ lawyer William Lerach finally cut a non-cooperation plea deal (Nathan Koppel’s WSJ Law Blog post is here) to resolve the longstanding criminal investigation into alleged undisclosed payments that Lerach and his firm made to class representatives and co-counsel in cases that they handled.
In certain defense and business circles, there is a fair amount of schadenfreude over Lerach’s demise — he had no reservation about alleging criminal conduct against business executives, such as he did when he claimed that Enron was shredding documents during the early stages of that company’s bankruptcy case (that claim turned out to be wrong).
However, before we get too sanguine about Lerach’s plea deal, let’s not forget the circumstances under which it has been obtained. The 61-year old Lerach was facing a horrifying trial penalty if he chose to fight the charges, and he almost certainly will lose his law license as a result of pleading guilty to a felony. And as Larry Ribstein has repeatedly pointed out, it doesn’t say much for our criminal justice system that the government is paying witnesses to testify against Lerach for the crime of paying his class representative clients. As Larry points out in his most recent post on the matter, the non-cooperation nature of the plea deal does not necessarily mean that the government isn’t providing Lerach some form of hidden incentive for his plea.
Update: Ted Frank argues that Lerach’s plea deal is, all things considered, not so bad for him, after all. On the other hand, Peter Henning is not so sure.