Questions about possible conflicts of interest are nothing new in the securities class-action bar. Federal prosecutors are investigating allegations that two of the biggest securities class-action lawyers, Mel Weiss and William Lerach, directed the payment of millions of dollars in "kickbacks'' to a retired Florida attorney to serve as a lead plaintiff in more than 50 suits they filed by Milberg Weiss Bershad Hynes & Lerach. Before it split up into two firms in 2004, Milberg Weiss was the nation's most successful securities class-action firm.
The investigation of Weiss and Lerach is raising questions about some of the dubious methods that plaintiffs' lawyers have used to round up clients in order to file class-action lawsuits.
With regard to Lifshitz, Colbart Birnet has appeared as a plaintiff in class actions filed by his firm against a number of mutual fund companies, as well as
(DYN - Get Report)
. Typically, the suits have alleged violations of securities laws and sought monetary damages from the defendants.
Colbart Birnet most notably appears as the lead plaintiff in a pending class action against
(FII - Get Report)
, one of many lawsuits arising out of the three-year-old mutual fund trading scandal. Bernstein Liebhard became the court-appointed lead counsel in the case based, in part, on the strength of Colbart Birnet's claim for $1.14 million damages.
The lead counsel designation is a plum assignment, meaning Bernstein Liebhard will a play major role in overseeing the litigation, arguing motions and negotiating any settlement with Federated. In light of Federated's $72 million settlement with securities regulators last November, Bernstein Liebhard is looking at a possible multimillion-dollar payday for its efforts.
All in all, the New York-based law firm has been on a tear for the past few years. The
National Law Journal
recently named Bernstein Liebhard as one of the country's "hot'' plaintiffs' firms. It played a starring role in negotiating a partial $1 billion settlement in a class-action lawsuit that alleges 55 Wall Street investment firms defrauded investors by artificially inflating the value of hundreds of dot-com IPOs in the late 1990s. Bernstein Liebhard was also co-lead counsel in a securities class action against
that settled last year for $120 million.