Former Milberg Weiss partner David Bershad has pled guilty to one count of conspiracy in connection with an ongoing investigation into illegal kickbacks that his former firm allegedly paid to individuals who served as lead plaintiffs in class action securities litigation. According an article in today’s New York Times, Bershad has detailed how the firm, beginning in the 1970s, recruited a “stable” of clients by secretly paying them up to ten percent of the legal fees the firm obtained.
The article reports that Bershad has agreed to disgorge $7.75 million and pay a $250,000 fine. He will also cooperate with the government’s investigation of other participants in the alleged conspiracy. The plea should put pressure on the Milberg Weiss firm and partner Steven Schulman who have also been indicted. Partner Melvyn Weiss and former partner William Lerach have not been indicted, but they may also face pressure from Bershad’s guilty plea.