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Another paid plaintiff was Seymour Lazar, an eccentric retiree in Palm Springs. He had collected $2.4 million in kickbacks from Milberg Weiss. Like Cooperman, he had bought little pieces of many companies so he could jump to the courthouse on command as an aggrieved investor.

Lerach and Weiss initially resisted the government’s investigation, insisting it was politically motivated, but Lerach finally capitulated, followed by Weiss. “I did a lot of stuff,” Lerach confided to a friend, according to the book.

Lerach insists that he was responsible for few frivolous suits. His foes “exaggerated the small amount of abuse present,” he says, but he would get a strong argument from companies such as Hewlett-Packard that spent bundles of money getting Lerached. He points to his successful suits, such as the $7 billion recovered in Enron, which came well after the 1995 legislation. And there is no arguing the point: Lerach was a brilliant legal strategist. He just fouled his own nest.

“The book is not so much about the lawyers but about the business of the law,” says Dillon. And it’s a tawdry business.

“It’s a pretty inefficient system for making investors whole,” says Cannon. It was inefficient when Lerach rose to prominence, and unfortunately, it still is.

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jv333 May 26, 2010 @ 7:42 p.m.

Don...We get it. You're no fan of Lerach. But how about Dick Cheney when CEO of Halliburton and exercising his stock options to collect $68.5 million...and the stock then plummets a few, short days later? Maybe that can be your next article? And address all these corporate execs taking millions in stock options?

Don't you have a much bigger problem with Lou Pei getting away with $250-350 million out of Enron with his exercised options before the huge collapse than the legal fees recognized by Bill Lerach?

The Fortune 500 must have the best stable of attorneys money can buy. Most judges on the appellate bench come out of the corporate defense teams, wouldn't you agree? It's hard to believe that they would all topple easily like dominoes to eagerly settle the suits brought by Bill Lerach. You mean companies like Disney or AOL Time Warner are concerned with bad PR and readily hand over millions to Lerach on behalf of defrauded shareholders without putting up a fight? This doesn't seem likely.

Also, is the "15 cents on the dollar" recovery for defrauded shareholders accurate? If class action attys representing plaintiffs are getting 10% of the settlement, where does all the money go? or is it divided up among the class in equal shares rather than proportionately?

And lastly, would we be better off with no lawsuits being brought for corporate fraud, which is pretty damned rampant? You report on it all the time...and we've just witnessed some massive Wall Street fraud that is mind-blowing. I'm all for civil and criminal penalties.

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SurfPuppy619 May 26, 2010 @ 9:15 p.m.

Also, is the "15 cents on the dollar" recovery for defrauded shareholders accurate? If class action attys representing plaintiffs are getting 10% of the settlement, where does all the money go?

Class actions give literally PENNIES on the dollar to the class-and many times it is NOT even in cash-but some worthless coupon for a future purchase-very common in class actions.

And the class lawyers get by far the lions share of the settlement, and it is far more than 10%.

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Visduh May 26, 2010 @ 9:39 p.m.

The sad part of this story is that Lerach's supporters have facts on their side, as do his detractors. Many of his suits were just shakedowns, and those were easy to orchestrate. The tough ones, where investors really were fleeced, are harder to prove. He did some of those, but then succumbed to the easy money of having plaintiffs-on-call ready to do his bidding, and who were willing to settle whenever he was ready.

We are bombarded with propaganda about "frivolous lawsuits" and "lawsuit abuse", yet when there is a legislative remedy for those things, it makes it harder for the truly injured to get redress. What ever happened to a court system where a frivolous suit was thrown out by the judge? That was the way it was supposed to work in the days of horses, buggies, and town criers. Is there a chance it could be made to work that simply again? Naaah!

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Don Bauder May 26, 2010 @ 9:46 p.m.

Response to post #1: I don't know of any financial columnist who has written more biting commentary about executives who get stock cheap in an IPO, run it up and dump for an enormous profit. Or executives who get paid excessively, abusing stock options (see column on Callaway Golf of very recent vintage.) Of course, abuses are rampant, and the plaintiff bar stepped in when government whored itself out to business and Wall Street (particularly Chris Cox at the SEC). But that doesn't mean that a plaintiff lawyer can shake down companies by filing a frivolous suit that will require production of voluminous documents and then wangle a settlement through bullying. Lerach did some great things, but these "Lerached" suits were all too numerous. And, of course, bribing plaintiffs gave him a leg up in the notorious rush to the courtroom. His world view -- skepticism about corporations and Wall Street -- is on target. He was a brilliant lawyer. His methods finished him off. He himself admitted it. Best, Don Bauder

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Don Bauder May 26, 2010 @ 9:49 p.m.

Response to post #3: The lead law firms often got 30% of the settlement during the worst period of abuses. Often that was justified, and can still be. Best, Don Bauder

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Don Bauder May 26, 2010 @ 9:56 p.m.

Response to post #3: The pendulum has swung too far in the other direction, and I blame Lerach and Weiss for much of that. What we need is a vigilant SEC and state regulators. The SEC is getting better, but not much better. It is still controlled by Wall Street law firms that dangle $2 million a year salaries to SEC lawyers to get the firms' clients off the hook. As I have written several times, the SEC lawyer handling the Peregrine swindle praised the Latham & Watkins study that whitewashed John Moores. Moores had set it up through his lawyer, Charles La Bella. Do you know where that former SEC lawyer went to work? You guessed it: Latham & Watkins. Best, Don Bauder

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Burwell May 26, 2010 @ 10:42 p.m.

Lerach has quite an estate in La Jolla, reportedly located on the site of the former Gagosian mansion. You need to rotate the image below to see Lerach's estate from all sides to appreciate the scale of his estate.

http://virtualglobetrotting.com/map/cliff-side-home-of-william-lerach/view/?service=1

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Burwell May 26, 2010 @ 10:49 p.m.

And the class lawyers get by far the lions share of the settlement, and it is far more than 10%.

==================

Lawyers who file class action lawsuits receive interest on their fee, starting from the date the lawsuit is first filed. This is why lawyers receive 50% or more of the settlement proceeds.

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SurfPuppy619 May 26, 2010 @ 11:12 p.m.

Cool link B-I didn't know Lerach lived on La Jolla Farms, he used to live in RSF.

If you go 5 houses to the left of Lerach (south) you have Ron Burkle's home-which when he bought it around 1999 the housing market was still in the toilet, and he still paid $25 million, and the home was not even finished b/c the builder went BK-but Burkle probably has the nicest home in the San Diego coastal area......

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SurfPuppy619 May 26, 2010 @ 11:17 p.m.

The late Jonas Salk lived right across the street from Lerach's home.

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jv333 May 27, 2010 @ 1:50 a.m.

Response to post #6. In my view, the great majority of the de-regulations re: the financial industry came about because Wall Street wanted less accountability and more autonomy. This de-regulatory legislation just didn't fall out of the sky. Wall St. paid hundreds of millions of dollars and greased the wheels of Congress for these laws to pass. Not only the Private Securities Litigation Reform Act aka the "Get Lerach Act" of 1995, but also the Financial Modernization Act of 2000 and the others de-regulating the futures trading market.

The passage of the Private Securities Litigation Reform Act was literally a license to steal for every corporate officer in the land. It removed liability for publishing fraudulent financial statements upon which investors relied. It gave rise to the massive fraud perpetrated by Enron, Worldcom, Tyco, AOL Time Warner, and on and on. It gave rise to the CDOs and the trillions of catastrophic securities that have been peddled globally. The Wall St powers wanted this and they wanted Lerach gone. They got their wish and now we are in a world of hurt.

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Don Bauder May 27, 2010 @ 6:25 a.m.

Response to post #7: Yes, the book by Dillon and Cannon talks about how Lerach eyed that home early in his career. Earlier, Lerach had a spread in Rancho Santa Fe. Best, Don Bauder

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Don Bauder May 27, 2010 @ 6:29 a.m.

Response to post #8: I would have to check that. A judge can make decisions on a fee, too. Best, Don Bauder

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Don Bauder May 27, 2010 @ 6:36 a.m.

Response to post #9: For years, people have oohed and aahed over the "Gagosian mansion." And Earl Gagosian was one of San Diego's rogues. His company, Royal Inns, made money building hotels but lost money operating them. It went belly-up. The bankruptcy trustee charged that Gagosian had amassed his riches selling off the inflated stock. Best, Don Bauder

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Don Bauder May 27, 2010 @ 6:42 a.m.

Response to post #10: I know Salk lived up there somewhere, but I couldn't swear you are right. Another San Diego rogue who had occupied the home now owned by Lerach was Edward Burns of Nucorp. Suing Nucorp was one of Lerach's early successes, detailed in the book. Best, Don Bauder

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Don Bauder May 27, 2010 @ 7 a.m.

Response to post #11: Certainly, the deregulatory moves late in the Bill Clinton presidency were greatly responsible for the wave of fraud that still engulfs us. Effective repeal of Glass-Steagall has proved to be a disaster. The 1995 act was partly responsible for the fraud tsunami, too. I often regretted that I had editorially favored its passage because of what I considered Lerach's abuses. However, keep in mind that some of Lerach's greatest successes, such as Enron, came after passage of the 1995 act. And, actually, the act initially gave Lerach's firm an even larger market share. The key problem in America and the rest of the industrialized world is the institutionalization of public-be-damned greed. I think you have to go back to Reagan's presidency, even somewhat before, to find its roots. Society was overthrowing the liberalism that had dominated U.S. culture and politics since the 1930s. The idea was that unshackled, business would act responsibly. I was strongly in favor of this at the time. But it has been proven sadly untrue. I was wrong. I have a low opinion of regulation, but I don't know what other recourse we have. Business and Wall Street have proved that they cannot act in the public interest. Look, in particular, at two phenomena today: Wall Street almost drove the world economy off the cliff but its lobbyists have thwarted strong reform moves, and the oil industry controls its regulators and Congress, and what do we get? The Gulf spill. Best, Don Bauder

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SurfPuppy619 May 27, 2010 @ 7:59 a.m.

Lawyers who file class action lawsuits receive interest on their fee, starting from the date the lawsuit is first filed. This is why lawyers receive 50% or more of the settlement proceeds.

Lawyers REQUEST both prejudgement (and post judgement) interest on awards, but pre judgement interest is rarely, if ever, granted by the judge.

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Don Bauder May 27, 2010 @ 8:41 a.m.

Response to post #17: The judges are often tough on awarding fees, and should be. Best, Don Bauder

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jv333 May 27, 2010 @ 10:31 a.m.

Response to #16: Don ... I agree with you that 1980 was a threshhold year and seminal point in our history. Under Reagan/Bush I we had a flurry of merger/acquisition mania. We had the "Wal-Marting" of America. 81 media owners were gobbled up and today we have 5 media monoliths. Look how 6 banking interests now control about 60% of our GDP. We have oligopolies and transnational corporate giants that now dominate every major economic sector...Big Oil/Energy, Big Agriculture, Big Media/News/Entertainment, Big Finance, Big Pharma/Medicine, Big Defense, Big Transportation, Big Retail/Wal-Mart and of course, Big Lobbying. The Gingrich "Contract with America" was really a "Contract ON America". Why have words like "antitrust" and "consumerism" gone out of the American vocabulary? Because the powers that be wanted them to.

Then you have 'public servants' like Cheney and Rumsfeld leaving the public sector with fortunes of $100 million and $200 million, respectively. We can only imagine what the Bush dynasty is worth.

This was the result of too much wealth and influence getting into too few hands. 1% of the US population owns 90% of the all the stocks and bonds. In 30 years, our economic landscape has been radically transformed as the middle class, that was built after WWII is in the process of getting dismantled. And I'd have to say the rightwing, big money interests are mostly responsible.

So the advent of all the de-regulations (Clinton's veto of the "Get Lerach Act" was over-ridden by the Gingrich Congress) should have come as no surprise.

I am glad that you admit your error in advocating de-regulations. The Gingrich Congress should have maintained the higher standards that were in place re: corporate financial reporting even if they wanted to curtail the filing of shareholder fraud suits. The result of removing many of the safeguards instituted by FDR has been catastrophic. But greed and corruption overtook any moral considerations...to the point where we started 2 needless wars that are sucking hundreds of billions out of our treasury and economy.

In the big picture, if Mr Lerach and other class action attorneys brought fraud suits that helped bring some accountability to the corporate suites and boardrooms, then good for them. Fraud drove the huge internet/stock bubble, which eventually burst...then the same happened in the mortgage/RE/related securities bubble, which resulted in an even larger debacle...and we just finished with the junk bonds/S&L scandal of the late 80s.

It's too bad that the threat of a class action fraud suit could not have prevented the collapse of a corporation like Enron, the 7th largest in the US at the time. Let's keep in mind that Lerach didn't sue Enron..they were gone. Lerach sued all the banking, accounting and legal interests that were complicit in the Enron fraud. That debacle destroyed the jobs and retirement funds of over 22,000 workers while those at the top raped the company.

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Visduh May 27, 2010 @ 11:36 a.m.

It would be so easy to echo the comments from jv333, but having lived through the late 70's, and remembering the bleak outlook held by so many people, I'm not so sure. The pendulum had swung too far in the direction of regulation and fearful corporate managers. When the swing started the other way the US pattern of extremes virtually guaranteed that it would go too far in the direction of abuse and greedy behavior. And so it did, as when we saw Glass-Steagall repealed.

If you want to see a piece of deregulation that DID work as intended, look at the Staggers Act that deregulated the railroads. With the ICC in place, it could be said that all the railroads were going bankrupt, the only question being how soon. Now we have four big and profitable systems in the US (two west, two east) plus two biggies that are Canadian but which operate extensively in the US. Traffic is up, profit is up, safety is up, and they are adding track instead of abandoning more of it. Not all deregulation is bad.

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jv333 May 27, 2010 @ 12:49 p.m.

Visduh ... one has to look at the origins of the regulations in the first place...and the actual, ultimate legislative effect and economic impact. I'm all in favor of creating and maintaining bona fide free markets and corporate accountability and good governance in every sector via legislation (and even then, its efficacy will likely vary depending on the industry). Other jurists have noted that we can't legislate morality, which includes the ethical handling of corporate funds. The ICC was likely conceived in cronyism and made to operate for the benefit of a few. I am not naive enough to say all regulation or deregulation is good. You have to analyze the motivation, the forces behind it, the goals and the economic results.

But to stay on point....we had a wave of de-regulations in the financial sector in the 1980s and 1990s. To be sure, these de-regs didn't happen by chance and cost several million in lobbying dollars to get thru Congress....you have seen the bubbles and the bursts...and we are where we are.

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SurfPuppy619 May 27, 2010 @ 1:09 p.m.

Let's keep in mind that Lerach didn't sue Enron..they were gone.

Actually Lerach (Milberg Wesiss) DID sue Enron, they were the lead firm, representing Calpers.

I saw the Complaint-it was 503 pages long and was, literally, 2 inches thick.

I'll say this, when you get a 500+ page Complaint, 2 inches thick, with 2,000+ alegations, you're in trouble.

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Don Bauder May 27, 2010 @ 1:14 p.m.

Response to post #19: I agree with almost all of what you say. I have devoted most of my life to fighting fraud. But I have also devoted a lot of my life to studying macroeconomics. So I must say that some of the big bubbles and subsequent burstings were only partly caused by fraud. Certainly, fraud and weak regulation played a role in the recent subprime bubble and crash. But easy money from the Fed may have played an even larger role. Fraud was the main force in the junk bond/takeover bubble, and organized crime money was behind much of it. But I feel that fraud was only part of the S&L scandal. Yes, there were big crooks. But horrendous regulation, along with stupidity of S&L managements, played a role. When money market mutual funds came along, the old-style S&Ls didn't know what to do. The government told them to raise money and lend outside their geographic areas. That was a big reason for that collapse. The tech IPO bubble that burst in early 2000 was greatly the result of fraud, but also horrendous Federal Reserve policy. (Greenspan bought into the "New Paradigm" tale, and looked the other way at PE multiples that were at infinity.) Lerach makes the mistake of blaming all these bubbles on fraud. Yes, fraud played a role -- often a major role -- but there were macroeconomic factors, too. Best, Don Bauder

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Don Bauder May 27, 2010 @ 1:20 p.m.

Response to post #20: I once was giving a speech to a bunch of transportation people in San Diego. During the preceding dinner, I mentioned to my host that trucking was one of the few areas in which deregulation seemed to have worked. He was experienced in that business, and let me have it, telling me that deregulation had screwed up trucking. (I had argued that it had worked partly because it had taken power from the Teamsters.) He was convincing. I'm sure there are examples of deregulation that worked. Here's the key: we are almost certainly headed into an era of re-regulation. I suspect that won't work either. That's why this is such a dilemma. Laissez faire doesn't work, but regulation isn't the answer either. Best, Don Bauder

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jv333 May 27, 2010 @ 1:21 p.m.

Surfpuppy... agreed. there were a series of suits...

after Enron was bankrupt and claims had been pursued and exhausted, Lerach led the team that sued several financial instutitions, et al to recover the $7.2 billion (which is what I was referring to) ... it was a $40 billion suit and the recovery should have actually been at least double. Conservative appellate judges thwarted that.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/09/BUCI12QRVE.DTL

I don't know how on earth the Enron corporate officers could have blown through this kind of money...

Enron's shareholders lost $74 billion in the four years before the company's bankruptcy ($40 to $45 billion was attributed to fraud).[145] As Enron had nearly $67 billion that it owed creditors, employees and shareholders received limited, if any, assistance aside from severance from Enron.[146] To pay its creditors, Enron held auctions to sell its assets including art, photographs, logo signs, and its pipelines.[147][148][149]

More than 20,000 of Enron's former employees in May 2004 won a suit of $85 million for compensation of $2 billion that was lost from their pensions. From the settlement, the employees each received about $3,100 each.[150] The following year, investors received another settlement from several banks of $4.2 billion.[145] In September 2008, a $7.2-billion settlement from a $40-billion lawsuit, was reached on behalf of the shareholders. The settlement was distributed among the lead plaintiff, University of California (UC), and 1.5 million individuals and groups.

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Don Bauder May 27, 2010 @ 1:25 p.m.

Response to post #21: The financial industry should never have been deregulated. Reason: the only success measurement money. Greed is the only variable. My father was a broker on La Salle Street in Chicago for more than 40 years. He was arch-conservative. He believed government should not interfere in business at all. But he had one exception: his own business, the brokerage industry. He knew that Wall Street was a sea of mendacity. The financial services industry HAD to be regulated, he would always say. Best, Don Bauder

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Don Bauder May 27, 2010 @ 1:27 p.m.

Response to post #22: Some part of Enron may have been a defendant, but the main defendants in the suit were the third parties that aided Enron, the so-called deep pockets. Best, Don Bauder

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Don Bauder May 27, 2010 @ 1:30 p.m.

Response to post #25: There is no doubt that Lerach's strategy in Enron was brilliant. Best, Don Bauder

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Don Bauder May 27, 2010 @ 4:26 p.m.

Response to post #29: Glad you mentioned David Dunn. He was NOT one of San Diego's rogues. I have always considered him a straight-shooting venture capitalist. He would provide seed money to a company and stay with that company for an extended period. So many venture capitalists provide upfront money, and take it as far as the IPO, when they start dumping for 1,000% profits or more, and pretty soon are out. Not Dunn. He always worked with the firms he funded. Best, Don Bauder

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SurfPuppy619 May 27, 2010 @ 8:58 p.m.

surfpuppy, not that it really matters, but I believe your estimate of what Burkle paid is a little high.

I did make a mistake and did not relize it until after I posted.

The Ron Burkle estate was LISTED at $25 million but actually sold for $20 million, which along with that Del Mar coastal house on 7 acres at the end of Via De La Valle (currently listed at $75 million) set the county record back then (both at $20 million each).

Laura Barry handled the Burkle sale and she worked out at my gym.

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Don Bauder May 27, 2010 @ 9:13 p.m.

Response to post #31: Sounds like you worked out at a very upscale gym. Laura got a pretty hefty commission on the sale. Best, Don Bauder

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jv333 May 28, 2010 @ 9:01 a.m.

Comment on #23. Don, you make a very good point about the Fed helping to fuel the real estate bubble by driving interest rate low and lower. I recall how gasoline was over $4 a gallon at the pump. The speculators in the oil futures market were flaring. There were hearings in Congress re: the de-regulated futures trading rules and I'm not sure what, if anything, came of it. Wasn't it interesting that gas prices were going wild as interest rates went lower. Why wasn't there much inflation in other goods and services? It smacked of a rigged market, don't you agree? I would have liked to have seen a class action suit on behalf of consumers then. The oil-soaked Bush govt certainly going to help. Greenspan was a very big tool in driving the housing bubble. But then you had the flood of subprime loans and the bundling of garbage which was peddled as a security that was garbage. So whether Greenspan was a knowing or unintentional participant, it resulted a global trillion dollar fraud. I think Greenspan was bullied into keeping rates low. He didn't do so in the early 90s and it probably was one more reason Bush I was not re-elected. The bully son would have none of it, whose main legacy was an administration that was fueled on fear and intimidation.

The Wall St crowd is a much smaller club than it was in yesteryear. The 1-per centers are now a much cozier club. Former IMF chief economist Simon Johnson has warned of the rise of the financial oligarchs. They've overtaken the SEC, Congress and the regulatory agencies. It's not the foxes guarding the hen house...the foxes have devoured most of the hens. We're all now victims of their excesses. And, if we're waiting for the govt to take on Wall St fraud in any serious way, let's not hold our breath. You saw the recent hearings with the Goldman Sachs folks. If Lerach had hubris, his was a headcold compared to the ego-cancer running thru Wall St.

I'd think that an active plaintiff bar with attorneys like Lerach bringing or threatening a private lawsuit will always be a better check and balance in dealing with stock and accounting manipulation, fraudulent financial statements, conversion, embezzlement, deceit and greed in taking on multi-billion dollar, transnational corporations. I hope there are others willing to take them on; but I fear there are very few in the legal field who are willing and able to battle these giants and their stables of corporate attorneys in any real way. Plus the laws are now heavily rigged in Wall St's favor. Maybe CEOs would settle quickly because they wanted a quick end to negative exposure of their fraud. Maybe they didn't want to miss their tee times. After all, it's easier to be negligent, flagrant and lazy with other people's money. In spite of it all, the wealthy have become enormously wealthier, which would be another good article for you. See www.sociology.ucsc.edu/whorulesameric...

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Don Bauder May 28, 2010 @ 1:18 p.m.

Response to posts #33 and #34: I don't have a problem with a stronger plaintiff bar. Obviously, we need a stronger SEC. I don't know that we will ever get that. One thing I would like to see is much stronger and more easily enforceable laws on insider trading. Current laws have deliberate loopholes so the biggest dumpers can go free. We have to have tough criminal penalties for crime in the suites. That would be a bigger deterrent than civil torts and a civil agency (SEC). Best, Don Bader

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jv333 May 28, 2010 @ 2:18 p.m.

Don ... Agreed. A stronger SEC (which may not ever happen)... stronger penalties against insider trading...civil and criminal consequences for crimes in the suites. All very much needed. In light of everything above and your revised outlook embracing financial regulation, I'd have to say you and Mr Lerach are probably very much in accord. I consider you both crusaders against corporate fraud so I was a bit surprised that your article on him was a bit on the negative and heavy-handed side.

At a recent event at the USD Law School, he stated that at least 75% of his cases involved insider trading. You have to admire the fact that he's taken on gargantuan foes and fought in places where most fear to tread. From the KPBS interview, add'l compensation given to a lead plaintiff is fine if approved by a judge post-settlement or post-judgment. Not so, if done before. And I'm willing to bet that this is probably goes on in legal practice more than we realize. Naturally Wall St wanted to criminalize 'bonus payments'. They wanted to get rid of class action suits to the greatest extent possible. And to a very good degree, they have. It sounded to me that if Mr Lerach was guilty of anything, it was overzealousness. According to Dillon's book, he did recover approx. $45 billion on behalf of defrauded shareholders in his career. He must have some grateful fans out there. He predicted today's Wall St mess while testifying before Congress in 1995. I commend the Wikipedia entry on his life and career. http://en.wikipedia.org/wiki/William_...

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SurfPuppy619 May 28, 2010 @ 3:13 p.m.

That Del Mar home will NEVER sell for anything even close to $75 million!

I think if it were to sell today-at market- it would be $20 million to MAYBE $25 million. But the location cannot be beat.

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Don Bauder May 28, 2010 @ 8:45 p.m.

Response to post #36: I agree that Lerach did great jobs in many suits. I agree that we need a strong plaintiff bar. I agree the government doesn't do its job. But I believe it was Lerach, Weiss, and other partners of the firms that crossed the line ethically and legally, causing the near-neutering of the plaintiff bar. Yes, some other firms may have bribed plaintiffs. Lerach was sloppy in the plaintiffs he chose. Best, Don Bauder

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Don Bauder May 28, 2010 @ 8:48 p.m.

Response to #s 37, 38 and 39: Since I don't know the house, I really can't add anything to this discussion. Best, Don Bauder

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MikeCopass May 28, 2010 @ 11 p.m.

Having followed the arc of Mr Lerach's career, this article reminded of a an apropos quote from 100 years ago, with all due respect to critics:

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."
- President Theodore Roosevelt

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Don Bauder May 29, 2010 @ 6:33 a.m.

Response to post #42: Roosevelt's foes could have used his emotional anti-critic argument against him. The oil trusts that he was instrumental in breaking up could have used it against him. Both William Howard Taft and Woodrow Wilson could have used it against him when he was running on the Bullmoose ticket against those two. Roosevelt, bless him, could be a very harsh critic of those who disagreed with him. After all, Teddy Roosevelt said of President McKinley, "He has no more backbone than a chocolate eclair." Best, Don Bauder

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jv333 May 29, 2010 @ 10:05 a.m.

I wish Teddy and Franklin Roosevelt were around today. They would be extremely busy. There were fearless and had guts. We now have oil/energy trusts, healthcare trusts, banking/finance trusts, agriculture/food trusts, transportation trusts, defense trusts, media trusts, high tech trusts, and then some.

In the big picture, these are the mega-powers that need scrutiny and regulation. How much "wal-mart" can an economy tolerate? The terms "worker's rights" and "labor rights" have been demonized. How many small businesses have to perish? How many journalists have to be fired before we realize that the enormous concentration of influence and power can create more social and political issues than it has solved? In any case, as these powers go more transnational, we are now witnessing the 'great downsizing' of America while the top 1% gained and will gain greater wealth. In 50 or 60 years, we have morphed into something vastly different...more akin to a plutocracy or oligopoly.

Simon Johnson says no bank should control more than $100 billion in assets. We've taken 'too big to fail' entities and allowed them to get bigger. I'd say we need more class actions, not less.

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Don Bauder May 29, 2010 @ 1:28 p.m.

Response to post #44: Agreed. We need TR and FDR. However, look at it this way: you mentioned the media trust. Do you think the media will be exposing the tremendous concentration of power in other industries? Best, Don Bauder

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jv333 May 29, 2010 @ 2:56 p.m.

Response to #45. Don, as I see it, not likely. Once the mega-powers set their sights on the media, they devoured and consolidated the airwaves. It was 'game on'...or 'game over'... depending on your point of view. The elimination of the Fairness Doctrine under Reagan/Bush and the Telecommunications Act of 1996 ushered in under the Gingrich era were the media (and journalism) game changers. Again, millions of dollars spent in lobbying Congress to change 68 years of settled regulation. As stated earlier, change can be good or bad, depending on who wins and who loses. If they wanted to lift ownership caps, they should have tried this in 10-20% increments and measured the results.

I heard former CBS newsman, Roger Mudd, speak here a few years ago. Sadly, CBS is down to 2 foreign news bureaus...London and Baghdad.

There was a large, media frenzy over the exposure of Janet Jackson's nipple to the exclusion of the types of massive fraud that you and Mr Lerach have battled in your respective careers. Just as the Pentagon is the tool of major industry in crossing borders to secure more resources and cheap labor, the mass media messaging.

I'd say we have larger, more sophisticated, and more potentially dangerous 'robber barons' now (with respect to our economy) than in the late 19th/early 20th Century. The Great Depression was the great leveler. I'll stop there.

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jv333 May 29, 2010 @ 3:43 p.m.

Sorry for the incomplete sentence....meant to say:

"Just as the Pentagon is the tool of major industry in crossing borders to secure more resources and cheap labor, the mass media messaging is similarly in tow."

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a2zresource May 29, 2010 @ 4:46 p.m.

Actually, the Pentagon is a system of systems of tools... See the old Boeing/SAIC info-ads regarding systems of systems for the now-defunct Future Combat Systems (BTC) program that would have formally rolled out in 2015.

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jv333 May 29, 2010 @ 5:20 p.m.

True, a2zresource ... the Big Defense umbrella is large.

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Don Bauder May 29, 2010 @ 7:11 p.m.

Response to post #46: The inequitable distribution of both wealth and income is just about as bad now as it was at the height of the Gilded Age. Today's robber barons are corporations, not individual titans. The laws favor the corporations now more than they favored the titans in the age of robber barons. The corporate lobbyists today have more influence than did the shills for the robber barons. Best, Don Bauder

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Don Bauder May 29, 2010 @ 7:13 p.m.

Response to post #47: Agreed. Best, Don Bauder

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Don Bauder May 29, 2010 @ 7:15 p.m.

Response to post #48: As the Pentagon is a system of tools, the taxpayers are a gaggle of fools. Best, Don Bauder

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Don Bauder May 29, 2010 @ 7:16 p.m.

Response to post #49: That umbrella is so large it has engulfed us. The result is meaningless wars. Orwell predicted it. Best, Don Bauder

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jv333 May 29, 2010 @ 9:16 p.m.

Comment on #46. Agreed. Which is why we need more Eliot Spitzers and Bill Lerachs. I wish they were running the the DOJ, the SEC and the other agencies charged with holding the corporate monoliths to acount. But no...they become political targets and have their careers terminated.

Not to mention the US Attys who didn't carry water for the last administration and were summarily fired.

And maybe the most abominable and disgraceful case of political assassination, former Ala. Gov. Don Seigalman---who held every top office in Alabama history in his 26 year career. 44 state Attorney General and 50 US legislators petitioned for his release, which occurred in March of 2008. Siegelman is currently working to see Karl Rove held in contempt for refusing to testify before a House committee that is investigating his conviction. Although Siegelman was convicted, his argument is he may not have been investigated, if not for Rove.

As to the Pentagon, it is so huge, I'm not sure they are accountable to anyone.

When the budget was signed into law on October 28, 2009, the final size of the Department of Defense's budget was $680 billion, $16 billion more than President Obama had requested.

Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff expected an additional supplemental spending bill, possibly in the range of $40–50 billion, by the Spring of 2010 in order to support the wars in Iraq and Afghanistan. Defense-related expenditures outside of the Department of Defense constitute between $216 billion and $361 billion in additional spending, bringing the total for defense spending to between $880 billion and $1.03 trillion in fiscal year 2010. By comparison, the state govt of CA spent about $204 billion in FY 2007-8.

I'm not sure if this includes the $44 billion for the CIA or not. In any case, staggering sums for our standing military. No wonder we have found wars to fight.

We're all for a strong defense...but a little overkill here, don't you think?

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Don Bauder May 29, 2010 @ 10:47 p.m.

Response to post #54: We need more Eliot Spitzers. But we don't need more Bill Lerachs. While he did some excellent things, he filed too many shakedown cases and, of course, bribed professional plaintiffs. Those two long-term courses of unethical action greatly negated the good work he did. Best, Don Bauder

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jv333 May 30, 2010 @ 12:37 a.m.

Regardless of the plaintiffs, I find it hard to believe that the blue chip attorneys of the Fortune 500 corporations allowed themselves to be bullied. Even if there was a hypothetical plaintiff, There was a good of deal of liability in the overwhelming number of cases.

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Don Bauder May 30, 2010 @ 6:42 a.m.

Response to post #56: Partly because of Lerach's excesses, the plaintiff bar faces an uphill fight in so many white collar fraud cases. We should not waste a crisis. The excessive gambling, collapse, and bailout of the banks, along the oil spill in the Gulf, should arouse public opinion to get new legislation through Congress so that plaintiff lawyers won't be hamstrung in class actions. BP is the interesting one. That company has to be mowed down in court. Its greed mandated the short cuts that produced the spill. Plaintiff bar, get busy! Best, Don Bauder

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jv333 May 30, 2010 @ 9:17 a.m.

Response to above. So you are saying that all these de-regs re: Wall St happened due to Mr. Lerach...and I'm saying if you are going to take on the Fortune 500 for fraud and abuse, you better be smart and tough enough (like TR and FDR) and have a very large operation of your own.

The plaintiff bar is never going to win any popularity contests. Medical malpractice awards for pain and suffering were capped long ago, severely curtailing those suits. Was that because there were Lerachs out there, or because the healthcare industry/insurance trust or oligopoly greased the wheels of legislatures.

Did the energy de-regulations of the 90s engineered by the Enrons of the world and blessed by VP Cheney's energy task force occur because of the Bill Lerachs of the world? or because of massive corruption of lawmakers?

No plaintiffs' attorney who has held the huge corporations and industries to account is going to win any popularity contests. We hear "tort reform" by the rightwing, big money forces all the time. Do you think medical malpractice attorneys are popular with the AMA and healthcare trust? Do you think legal malpractice attorneys are popular with the ABA?

Are there any Lerachs or Spitzers out there tough enough, smart enough and with adequate resources whose practices haven't been severely legislatively hamstrung to even take on entities like a BP?

I think if we study industry de-regulation across the board from big energy to big pharma/healthcare to big ag, and so on .... this has happened due to wholesale and massive corruption of legislatures by corporate lobbyists. For a huge eye-full on this, see the newly-released documentary on Jack Abramoff titled "Casino Jack and the United States of Money." Granted, he was probably a very tough and formidable opponent. What would be your attitude in taking on the Fortune 500 with cases of enormous complexity and magnitude? You agree that huge oligarchs have been allowed to congeal and I saw they have tilted the playing field way too heavily in their favor...and that includes our legislative machinery and probably our judicial system to a great extent (especially at the appellate level.) (cf. the latest USSC ruling that allows corporations to provide unlimited funds for political campaigns. They just paved the way for more Jack Abramoffs.)

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Don Bauder May 30, 2010 @ 3:58 p.m.

Response to post #58: I have said all along that deregulation turned out poorly, that the trusts are corrupt, along with regulators. I doubt if any financial journalist has written as much about the SEC's tolerance of white collar crime by the big boys than I have. But Lerach abused the process. Period. Sans Lerach and Weiss, there might eventually have been securities anti-tort legislation, but I doubt it would have been as severe. I have read about the Abramoff movie. Sounds like a good one. Best, Don Bauder

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jv333 June 1, 2010 @ 10:26 a.m.

Re: #59. Don, I commend this article I found on 'incentive awards for lead plaintiffs in class action suits.' As you can see, in most of these class action settlements, these payments are perfectly fine with court permission. (I would imagine there are many private agreements between attorneys and clients of which we aren't aware.) Of course, headline writers would call these kickbacks.

Google INCENTIVE AWARDS TO CLASS ACTION PLAINTIFFS: AN EMPIRICAL STUDY and see the article by Miller at britannica.com

Are there any allegations of shake-downs out there against attorneys or firms who bring mass tort, employment discrimination, consumer credit and other class actions? I suspect that Mr Lerach and his firm put together a Fortune 500 law firm to take on Fortune 500 crime and fraud.

The fact is that journalists and class action attorneys bringing shareholder fraud suits are both on the endangered species list. You may chose to distance yourself from Mr Lerach; but I think you are actually comrades in arms fighting major fraud on parallel tracks. You are both for sensible regulation of the finance sector and you are both for holding Wall Street to account.

I suggest we look at all the Wall Street de-regulations as a group, not separately. The passage of the "Get Lerach Act" and the Telecommunications Act in 1995 were a key dominoes which emboldened Wall St and the rightwing to further dismantle regulations. Once they could control the mass media and remove checks on corporate officer fraud liability, it was 'so long' Glass-Steagall and futures regs, etc. It was 'hello' to CDOs and trillions in worthless securities. The corporate 'robber barons' of this Gilded Age are global now with our trillion-dollar Pentagon as their security force, paid for by public funds.

They have a nice racket going which will probably only be tamed by a massive economic downturn and public outrage. I think the outrage is there, it's now a matter of organizing and channeling the public outrage to bring about corrective policy and action. All the undue influence in the world cannot help if the bums are voted out of office and we elect those more like TR and FDR.

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Don Bauder June 1, 2010 @ 12:25 p.m.

Response to post #60: Yes, there is a lot of outrage out there. But members of Congress are still in the financial pockets of the big banks. There has to be enough outrage to get the pols to fear that their careers are in jeopardy. I don't know that we have hit that threshold yet. BP is certainly helping on the question of lax-to-no oil regulation. Hopefully, class action lawyers will represent the injured parties and get a bundle from that company. I hope it can't dodge the liability by going bankrupt as asbestos companies did. Best, Don Bauder

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jv333 June 4, 2010 @ 3:36 p.m.

On another note ... Mr Lerach has some alarming news about our devastated pension and retirement funds/plans....apparently Wall St has sunk their mitts into these huge money sources and they are under-funded by $4 trillion ....

The waste matter will be hitting the fans soon ... do u have any updates on the this from a national perspective as to what may happen to public and private retirement plans? will the gold watches run out?

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Don Bauder June 4, 2010 @ 8:19 p.m.

Response to post #62: I have been writing for years about how the City's pension woes could drive it to bankruptcy. Since 2004, it has probably been the topic I have discussed the most. In many of those columns and blogs, I have mentioned that states and corporations could be dragged down by their pension obligations, too. Warren Buffett made news today by talking about the problems of pension funds impacting municipal bonds; his Berkshire Hathaway has cut back sharply on muni bond holdings. Best, Don Bauder

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pondering Aug. 15, 2012 @ 5:52 a.m.

Actually I think it's pretty cool that Lerach before he made his money pined for the Gagosian mansion, located at 9776 La Jolla Farms Road, and now owns the newer house built at the same spot.

I grew up on LJ Farms, just down the street from the Gagosian House, on the same ocean side and notwithstanding the fact that our house was huge and on nearly six acres the Gagosian's green copper top monstrosity always stood out. I can't blame Lerach for always wanting some of that, and given that he served his two years, I can't hold it against him that he's living in luxury now.

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