William Lerach
Encyclopedia
William Shannon Lerach (Bill Lerach) (b. March 14, 1946, Ohio River
Valley, Midwestern United States
) was an American lawyer
who specialized in class action
lawsuits before pleading guilty to obstruction of justice charges in 2007. He was appointed by President Clinton to the U.S. Holocaust Memorial Council in 1998. The $7.12 billion he obtained in the case against Enron is currently the largest sum ever recovered in a group of securities class-action lawsuits in U.S. history. About 75% of the class action suits filed and led by Lerach involved insider trading, stock fraud and stock manipulation. Over the course of his legal career, Lerach recovered approximately $45 billion on behalf of defrauded shareholders. Lerach pled guilty to one count of obstruction of justice and began a two year prison sentence in 2007. He was disbarred in 2009. Lerach was a major Democratic donor for many years. His case and sentencing were presided over by US District Court Judge John F. Walter, nominated to the bench by President George W. Bush in 2002.
For over 30 years, Bill Lerach was one of the leading securities lawyers in the United States. He headed up the prosecution of hundreds of securities class and stockholder derivative actions which resulted in billions of dollars of recoveries for defrauded shareholders of Wall Street banks, major accounting firms, corporations and insurance companies. Lerach was the subject of considerable media attention and a frequent commentator on economic and political matters and securities and corporate law.
Lerach was involved in many of the largest and highest profile securities class action and corporate derivative suits in recent years, including Enron
, Dynegy
, Qwest
, WorldCom, Citibank
, Drexel Burnham, Tyco
, Merrill Lynch
, Bank of America
, Disney, Goldman Sachs
, Credit Suisse First Boston
, Global Crossing
, AT&T
, Hewlett-Packard
, Apple Computer
, ExxonMobil
, R.J. Reynolds
, Arthur Andersen
, and AOL Time Warner. For more than two decades, he and his then firm Milberg Weiss (called by many “the meanest law firm in the country”) threatened, shook down and sued top Fortune 500 companies, recovering more than $45 billion in ill-gotten gains from corporations and banks on behalf of shareholders defrauded at a time when wealth in America had reached unprecedented heights and corporate scandals involving fraud, deception and insider trading were running rampant.
Lerach achieved enormous victories in suing some of the largest names in American business and was hot on the heels of Halliburton and its then CEO Dick Cheney, the Vice President of the United States, when he fell from grace. Lerach had turned his sights on Halliburton and Cheney, the former CEO. In Lerach's lawsuit against Halliburton, he argued that Cheney had fled the company just ahead of the stock collapse, finding refuge in the White House. The attorney was in a position to subpoena and demand public testimony from the vice president, and he doubted that Cheney would be able to successfully hide behind a claim of executive privilege.
Lerach's on-camera comments were prominently featured in the Oscar-nominated 2006 documentary about the monumental collapse of the 7th largest corporation in the U.S., “Enron: The Smartest Guys in the Room
.” For years he was listed among the “Best Lawyers in America.” Mr. Lerach frequently lectured on class and derivative actions, accountants’ liability, and attorneys’ fees, and has been a guest lecturer at Harvard Law School, Stanford Univ Law School, Univ of San Diego Law School, UCLA Law School, the Council of Institutional Investors and the International Corporate Governance Network.
Lerach has testified before federal and state legislative committees concerning corporate governance and securities matters and is frequently quoted in the national media regarding corporate issues. He has published numerous articles and op-ed pieces, including "Achieving Corporate Governance Enhancements Through Litigation," keynote address to the Council of Institutional spring Meeting, March 27, 2001; "Why Insiders Get Rich, and the Little Guy Loses," LA Times, Jan 20 2002; "The Alarming Decline in the Quality of Financial Reporting;" "The Chickens Have Come Home to Roost: How Wall Street,the Big Accounting Firms and Corporate Interests Chloroformed Congress and Cost America's Investors Trillions"; "The Average Joe Deserves a Bailout,"; "Loser CEOs, Raking It In," Washington Post, Nov 11 2007; "Always an Insider's Game," AP Jan 6 2008 and "What About the Rest of Us? Bailout Fails to Help the Little Guy," Pittsburgh Post-Gazette, Mar 23, 2008. Mr Lerach has addressed the Take Back America Convention in Washington DC. Highlights of his speech and comments are included in the book, "Taking Back America-and Taking Down the Radical Right" by Robert Borosage and Katrina vanden Heuvel
(2004), Chapter 11 "Holding Corporations Accountable" which was adapted from Lerach's Commencement Address delivered at the University of Pittsburgh Law School.
Lerach earned his undergraduate and law degrees from the University of Pittsburgh
. He gave the May 2003 Commencement Address "American Law: Instrument of Social Progress or Weapon of Repression?" at the Univ of Pittsburgh Law School. The University of Pittsburgh bestowed one of its highest awards on Mr. Lerach, designating him a "Legacy Laureate" reserved for the University's most outstanding graduates.He has been a major financial donor to Democratic Party organizations at the state and national level. In 1993, Lerach was cited in a Forbes magazine article stating that "I have the greatest practice of law in the world, I have no clients." In law, a class action
or a representative action is a form of lawsuit where a large group of people collectively bring a claim to court and/or where a class of defendants are being sued.
In August 2002, The Nation magazine published a cover story by William Greider featuring Lerach with the title, "Is This America's Top Corporate Crime Fighter?"
On a televised PBS broadcast, Lerach was part of a panel to discuss accounting fraud, corporate misconduct and securities laws and regulations on the program, "NOW with Bill Moyers" on at least two occasions, September 27, 2002 and November 21, 2003
Before leaving his law practice in August 2007 to focus on an ongoing criminal investigation, Lerach was a partner in the San Diego, California
based firm, Coughlin Stoia Geller Rudman and Robbins
, now known as Robbins, Geller, Rudman and Dowd. He had formed the firm in 2004, after leaving the firm of Milberg Weiss, which was subsequently indicted
.
According to a June 2007 statement in which he alluded to the ongoing Milberg Weiss investigation, Lerach was considering retirement. As of August 31, 2007, Lerach is no longer a member of the San Diego firm, which is now known as Coughlin Stoia Geller Rudman & Robbins LLP
.
Lerach pled guilty to one felony count of conspiracy to commit obstruction of justice and making false declarations under oath. On Monday February 11, 2008, Lerach was sentenced to two years in federal prison, two years' probation, fined $250,000, and ordered to complete 1,000 hours of community service because of his involvement in a kickback scheme. He served his sentence at the Federal Correctional Facility Safford located in Arizona. The final two-and-a-half months were spent in home confinement following stints in the Arizona federal prison and a halfway house in San Diego. His license to practice law was suspended in December, with disbarment
expected. On March 12, 2009, Lerach was disbarred by the California State Bar. He was officially released from custody on March 8, 2010. Lerach's former Milberg Weiss partner Melvyn Weiss
was similarly sentenced in early June 2008.
In an interview following his release, Lerach offered his thoughts and opinions about possible political motivation, the timing of his prosecution and generally-accepted legal practice regarding lead plaintiffs in class action lawsuits.
In March 2010, a book about Lerach's life and career was published. "Circle of Greed: The Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to its Knees" was researched and written by Pulitzer Prize-winning journalists Patrick Dillon and Carl M. Cannon, who had followed Lerach's career for many years when employed by the Copley Press
. Although the title suggests that the book is critical of Lerach, it is not entirely unsympathetic. The writers hardly soft-pedal Bill Lerach’s crimes or his rough edges. Lerach is on record as telling other journalists that he thought Dillon and Cannon were tough, but fair. Lerach fully cooperated in the writing of the book without asking to see the manuscript before it was published in its final form. Dillon and Cannon interpreted Lerach's willingness to let the chips fall as they might demonstrated a gutsy pragmatism and a confidence in his own story that they could not help but admire.
While testifying in Congress in 1995 against the passage of the Private Securities Litigation Reform Act
(part of Newt Gingrich
's Contract with America
) which Congress passed by over-riding the veto of President Clinton, Lerach issued an eerily prescient warning at the hearing: "In 10 or 15 years you will be holding another hearing about a debacle in the securities market that will make you remember the S&L mess
with fondness."
Ohio River
The Ohio River is the largest tributary, by volume, of the Mississippi River. At the confluence, the Ohio is even bigger than the Mississippi and, thus, is hydrologically the main stream of the whole river system, including the Allegheny River further upstream...
Valley, Midwestern United States
Midwestern United States
The Midwestern United States is one of the four U.S. geographic regions defined by the United States Census Bureau, providing an official definition of the American Midwest....
) was an American lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
who specialized in class action
Class action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...
lawsuits before pleading guilty to obstruction of justice charges in 2007. He was appointed by President Clinton to the U.S. Holocaust Memorial Council in 1998. The $7.12 billion he obtained in the case against Enron is currently the largest sum ever recovered in a group of securities class-action lawsuits in U.S. history. About 75% of the class action suits filed and led by Lerach involved insider trading, stock fraud and stock manipulation. Over the course of his legal career, Lerach recovered approximately $45 billion on behalf of defrauded shareholders. Lerach pled guilty to one count of obstruction of justice and began a two year prison sentence in 2007. He was disbarred in 2009. Lerach was a major Democratic donor for many years. His case and sentencing were presided over by US District Court Judge John F. Walter, nominated to the bench by President George W. Bush in 2002.
For over 30 years, Bill Lerach was one of the leading securities lawyers in the United States. He headed up the prosecution of hundreds of securities class and stockholder derivative actions which resulted in billions of dollars of recoveries for defrauded shareholders of Wall Street banks, major accounting firms, corporations and insurance companies. Lerach was the subject of considerable media attention and a frequent commentator on economic and political matters and securities and corporate law.
Lerach was involved in many of the largest and highest profile securities class action and corporate derivative suits in recent years, including Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
, Dynegy
Dynegy
Dynegy Inc. , based in Houston, Texas, United States, is a large owner and operator of power plants and a player in the natural gas liquids and coal business...
, Qwest
Qwest
Qwest Communications International, Inc. was a large United States telecommunications carrier. Qwest provided local service in 14 western U.S. states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.On April...
, WorldCom, Citibank
Citibank
Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...
, Drexel Burnham, Tyco
Tyco
Tyco may refer to:* Tyco International, a diversified industrial conglomerate* Tyco Electronics, a former segment of Tyco International* Tyco Toys, a division of Mattel...
, Merrill Lynch
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
, Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
, Disney, Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, Credit Suisse First Boston
Credit Suisse First Boston
Credit Suisse First Boston was the former name of the banking firm Credit Suisse.-History:In 1978, Credit Suisse and First Boston Corporation formed a London-based 50-50 investment banking joint venture called the Financière Crédit Suisse-First Boston...
, Global Crossing
Global Crossing
Global Crossing Limited was a telecommunications company that provides computer networking services worldwide. It maintained a large backbone and offered transit and peering links, VPN, leased lines, audio and video conferencing, long distance telephone, managed services, dialup, colocation and...
, AT&T
AT&T
AT&T Inc. is an American multinational telecommunications corporation headquartered in Whitacre Tower, Dallas, Texas, United States. It is the largest provider of mobile telephony and fixed telephony in the United States, and is also a provider of broadband and subscription television services...
, Hewlett-Packard
Hewlett-Packard
Hewlett-Packard Company or HP is an American multinational information technology corporation headquartered in Palo Alto, California, USA that provides products, technologies, softwares, solutions and services to consumers, small- and medium-sized businesses and large enterprises, including...
, Apple Computer
Apple Computer
Apple Inc. is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad...
, ExxonMobil
ExxonMobil
Exxon Mobil Corporation or ExxonMobil, is an American multinational oil and gas corporation. It is a direct descendant of John D. Rockefeller's Standard Oil company, and was formed on November 30, 1999, by the merger of Exxon and Mobil. Its headquarters are in Irving, Texas...
, R.J. Reynolds
R.J. Reynolds
Richard Joshua "R. J." Reynolds was an American businessman and founder of the R. J. Reynolds Tobacco Company....
, Arthur Andersen
Arthur Andersen
Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG, providing auditing, tax, and consulting services to large corporations...
, and AOL Time Warner. For more than two decades, he and his then firm Milberg Weiss (called by many “the meanest law firm in the country”) threatened, shook down and sued top Fortune 500 companies, recovering more than $45 billion in ill-gotten gains from corporations and banks on behalf of shareholders defrauded at a time when wealth in America had reached unprecedented heights and corporate scandals involving fraud, deception and insider trading were running rampant.
Lerach achieved enormous victories in suing some of the largest names in American business and was hot on the heels of Halliburton and its then CEO Dick Cheney, the Vice President of the United States, when he fell from grace. Lerach had turned his sights on Halliburton and Cheney, the former CEO. In Lerach's lawsuit against Halliburton, he argued that Cheney had fled the company just ahead of the stock collapse, finding refuge in the White House. The attorney was in a position to subpoena and demand public testimony from the vice president, and he doubted that Cheney would be able to successfully hide behind a claim of executive privilege.
Lerach's on-camera comments were prominently featured in the Oscar-nominated 2006 documentary about the monumental collapse of the 7th largest corporation in the U.S., “Enron: The Smartest Guys in the Room
Enron: The Smartest Guys in the Room
Enron: The Smartest Guys in the Room is a 2005 documentary film based on the best-selling 2003 book of the same name by Fortune reporters Bethany McLean and Peter Elkind, a study of one of the largest business scandals in American history...
.” For years he was listed among the “Best Lawyers in America.” Mr. Lerach frequently lectured on class and derivative actions, accountants’ liability, and attorneys’ fees, and has been a guest lecturer at Harvard Law School, Stanford Univ Law School, Univ of San Diego Law School, UCLA Law School, the Council of Institutional Investors and the International Corporate Governance Network.
Lerach has testified before federal and state legislative committees concerning corporate governance and securities matters and is frequently quoted in the national media regarding corporate issues. He has published numerous articles and op-ed pieces, including "Achieving Corporate Governance Enhancements Through Litigation," keynote address to the Council of Institutional spring Meeting, March 27, 2001; "Why Insiders Get Rich, and the Little Guy Loses," LA Times, Jan 20 2002; "The Alarming Decline in the Quality of Financial Reporting;" "The Chickens Have Come Home to Roost: How Wall Street,the Big Accounting Firms and Corporate Interests Chloroformed Congress and Cost America's Investors Trillions"; "The Average Joe Deserves a Bailout,"; "Loser CEOs, Raking It In," Washington Post, Nov 11 2007; "Always an Insider's Game," AP Jan 6 2008 and "What About the Rest of Us? Bailout Fails to Help the Little Guy," Pittsburgh Post-Gazette, Mar 23, 2008. Mr Lerach has addressed the Take Back America Convention in Washington DC. Highlights of his speech and comments are included in the book, "Taking Back America-and Taking Down the Radical Right" by Robert Borosage and Katrina vanden Heuvel
Katrina vanden Heuvel
Katrina vanden Heuvel is the editor, publisher, and part-owner of the magazine The Nation. She has been the magazine's editor since 1995. She is a frequent guest on numerous television programs...
(2004), Chapter 11 "Holding Corporations Accountable" which was adapted from Lerach's Commencement Address delivered at the University of Pittsburgh Law School.
Lerach earned his undergraduate and law degrees from the University of Pittsburgh
University of Pittsburgh
The University of Pittsburgh, commonly referred to as Pitt, is a state-related research university located in Pittsburgh, Pennsylvania, United States. Founded as Pittsburgh Academy in 1787 on what was then the American frontier, Pitt is one of the oldest continuously chartered institutions of...
. He gave the May 2003 Commencement Address "American Law: Instrument of Social Progress or Weapon of Repression?" at the Univ of Pittsburgh Law School. The University of Pittsburgh bestowed one of its highest awards on Mr. Lerach, designating him a "Legacy Laureate" reserved for the University's most outstanding graduates.He has been a major financial donor to Democratic Party organizations at the state and national level. In 1993, Lerach was cited in a Forbes magazine article stating that "I have the greatest practice of law in the world, I have no clients." In law, a class action
Class action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...
or a representative action is a form of lawsuit where a large group of people collectively bring a claim to court and/or where a class of defendants are being sued.
In August 2002, The Nation magazine published a cover story by William Greider featuring Lerach with the title, "Is This America's Top Corporate Crime Fighter?"
On a televised PBS broadcast, Lerach was part of a panel to discuss accounting fraud, corporate misconduct and securities laws and regulations on the program, "NOW with Bill Moyers" on at least two occasions, September 27, 2002 and November 21, 2003
Before leaving his law practice in August 2007 to focus on an ongoing criminal investigation, Lerach was a partner in the San Diego, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
based firm, Coughlin Stoia Geller Rudman and Robbins
Coughlin Stoia Geller Rudman and Robbins
Robbins, Geller Rudman & Dowd LLP is a law firm in San Diego, California. The firm was formed in May 2004 when Milberg Weiss Bershad Hynes & Lerach split with the New York office, becoming Milberg Weiss Bershad & Schulman....
, now known as Robbins, Geller, Rudman and Dowd. He had formed the firm in 2004, after leaving the firm of Milberg Weiss, which was subsequently indicted
Indictment
An indictment , in the common-law legal system, is a formal accusation that a person has committed a crime. In jurisdictions that maintain the concept of felonies, the serious criminal offence is a felony; jurisdictions that lack the concept of felonies often use that of an indictable offence—an...
.
According to a June 2007 statement in which he alluded to the ongoing Milberg Weiss investigation, Lerach was considering retirement. As of August 31, 2007, Lerach is no longer a member of the San Diego firm, which is now known as Coughlin Stoia Geller Rudman & Robbins LLP
Limited liability partnership
A limited liability partnership is a partnership in which some or all partners have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important...
.
Lerach pled guilty to one felony count of conspiracy to commit obstruction of justice and making false declarations under oath. On Monday February 11, 2008, Lerach was sentenced to two years in federal prison, two years' probation, fined $250,000, and ordered to complete 1,000 hours of community service because of his involvement in a kickback scheme. He served his sentence at the Federal Correctional Facility Safford located in Arizona. The final two-and-a-half months were spent in home confinement following stints in the Arizona federal prison and a halfway house in San Diego. His license to practice law was suspended in December, with disbarment
Disbarment
Disbarment is the removal of a lawyer from a bar association or the practice of law, thus revoking his or her law license or admission to practice law...
expected. On March 12, 2009, Lerach was disbarred by the California State Bar. He was officially released from custody on March 8, 2010. Lerach's former Milberg Weiss partner Melvyn Weiss
Melvyn Weiss
Melvyn I. Weiss was an American attorney who co-founded the well-known plaintiff class action law firm Milberg Weiss.- Career :...
was similarly sentenced in early June 2008.
In an interview following his release, Lerach offered his thoughts and opinions about possible political motivation, the timing of his prosecution and generally-accepted legal practice regarding lead plaintiffs in class action lawsuits.
In March 2010, a book about Lerach's life and career was published. "Circle of Greed: The Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to its Knees" was researched and written by Pulitzer Prize-winning journalists Patrick Dillon and Carl M. Cannon, who had followed Lerach's career for many years when employed by the Copley Press
Copley Press
Copley Press was a privately held newspaper business, founded in Illinois, but later based in La Jolla, California. Its flagship paper was The San Diego Union-Tribune.-Pulitzer Prizes:...
. Although the title suggests that the book is critical of Lerach, it is not entirely unsympathetic. The writers hardly soft-pedal Bill Lerach’s crimes or his rough edges. Lerach is on record as telling other journalists that he thought Dillon and Cannon were tough, but fair. Lerach fully cooperated in the writing of the book without asking to see the manuscript before it was published in its final form. Dillon and Cannon interpreted Lerach's willingness to let the chips fall as they might demonstrated a gutsy pragmatism and a confidence in his own story that they could not help but admire.
While testifying in Congress in 1995 against the passage of the Private Securities Litigation Reform Act
Private Securities Litigation Reform Act
The United States Private Securities Litigation Reform Act of 1995, Pub. L. 104-67, 109 Stat. 737 implemented several substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation, and...
(part of Newt Gingrich
Newt Gingrich
Newton Leroy "Newt" Gingrich is a U.S. Republican Party politician who served as the House Minority Whip from 1989 to 1995 and as the 58th Speaker of the U.S. House of Representatives from 1995 to 1999....
's Contract with America
Contract with America
The Contract with America was a document released by the United States Republican Party during the 1994 Congressional election campaign. Written by Larry Hunter, who was aided by Newt Gingrich, Robert Walker, Richard Armey, Bill Paxon, Tom DeLay, John Boehner and Jim Nussle, and in part using text...
) which Congress passed by over-riding the veto of President Clinton, Lerach issued an eerily prescient warning at the hearing: "In 10 or 15 years you will be holding another hearing about a debacle in the securities market that will make you remember the S&L mess
Savings and Loan crisis
The savings and loan crisis of the 1980s and 1990s was the failure of about 747 out of the 3,234 savings and loan associations in the United States...
with fondness."