Circle of Greed
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paid a call to J. J. Little: Richard Wren, interview by PD, November 17, 2008.
Negotiations commenced: Virginia Curry, interview by PD, December 8, 2008.
“I was just trying”: Richard Wren, interview by PD, November 17, 2008.
From Lloyd’s of London: Virginia Curry, interview by PD, December 8, 2008.
set up a sting: Ibid.
a new digital transmitter: Ibid.
“Does this sound familiar?”: Virginia Curry, interview by PD, March 7, 2009.
Quoting FBI special agent: Carol Vogel, “A Picasso and a Monet Turn Up in Storage,” New York Times, June 7, 1997.
lanky and taciturn: Richard Robinson, interview by PD, February 26, 2009.
no honor among thieves: Richard Robinson, interview by PD, December 10, 2008.
“I wasn’t going to let this case die”: Virginia Curry, interview by PD, December 8, 2008.
Los Angeles grand jury: Richard Robinson, interview by PD, December 10, 2008.
a sense of gratitude: William S. Lerach, interview by PD, March 24, 2008.
“He’d better not be lying”: Ibid.
CHAPTER 18: PHOENIX RISING
Lerach’s tangling with Chris Cox: Diana B. Henriques, “Parties Clash at Hearing on Securities Litigation,” New York Times, January 20, 1995.
“We do not solicit plaintiffs”: Common Sense Legal Reform Act, hearings before the Subcommittee on Telecommunications and Finance, House Committee on Commerce, January 19, 1995.
an alternative version: text of the Private Securities Litigation Reform Act of 1995, see http://www.law.cornell.edu/uscode/15/usc_sec_15_00000078===u004=.html.
“Look, we can’t pay plaintiffs”: William S. Lerach, interview by PD, January 22, 2009.
The New York partners: Ibid.
“before the truth regarding”: “Class Action Suit Filed Against NetManage, Inc. and Its Officers and Directors Alleging Misrepresentations, False Financial Statements and Insider Trading,” Business Wire, January 10, 1997.
“Seven of the individual”: “Class Action Suit Filed Against Read-Right Corporation and Its Officers,” Business Wire, January 17, 1997.
“insider trading profits”: “Class Action Suit Filed Against America Online Inc. and Its Officers, Directors and Accountants,” Business Wire, February 24, 1997.
“One thing that is very clear”: Quoted in Leslie Eaton, “Class Action Lawsuits Are Not Turning Out Exactly as Congress Planned,” New York Times, February 27, 1997.
this percentage had doubled: A Statistical and Legal Analysis of Class Action Securities Fraud Litigation Under the Private Securities Litigation Reform Act of 1995,” working paper, Stanford Law School, February 1997. 269
“I warned Congress”: Quoted in Eaton, “Class Action Lawsuits.”
“The dance is over”: Quoted in Herb Greenberg, “Why One Prominent Class Action Attorney Calls It Quits,” San Francisco Chronicle, February 29, 1996.
Wright v. Ernst & Young: Nicholas F. Schanbaum, “Scheme Liability: Rule 10b-5(a) and Secondary Actor Liability After Central Bank,” Review of Litigation, Winter 2007.
The Second Circuit agreed: Ibid.
filed against a Silicon Valley company: Dannenberg et al. v. Software Toolworks, Inc., Deloitte & Touche, et al., U.S. Court of Appeals for the Ninth Circuit, February 18, 1994.
“prepared after extensive review”: Ibid.
calling on potential plaintiffs: William S. Lerach, interview by PD, April 16, 2008.
did some of his best work: Jonathan W. Cuneo, interview by CMC, January 6, 2009.
“Dot-con”: William S. Lerach, “The Chickens Have Come Home to Roost,” Milberg Weiss, Hynes & Lerach internal document, 2002.
public pension funds acted as lead plaintiffs: Randall Thomas, “Pension Funds as Shareholder Activists,” En Banc: Vanderbilt Law Review 61 (October 2008).
Edward R. McCracken: Cynthia Bournellis, “SGI’s CEO McCracken Tumbles,” Electronic News, November 3, 1997.
negotiate an exchange of convertible stock: “Class Action Suit Filed Against Silicon Graphics, Inc. and Its Officers and Directors,” Business Wire, June 23, 1998.
“To do this”: Edmund J. Janas v. Edward R. McCracken et al., U.S. District Court, Northern District of California, October 17, 1996. See http://securities.stanford.edu/1011/SGI96/068.html.
“based upon a review”: Floyd Norris, “Stage Set for Appellate Ruling on Class Action Suits vs. Companies,” New York Times, May 30, 1997.
“motive, opportunity”: Dan Goodin, “SGI Stock Suit Could Set Precedent,” CNET News, June 10, 1988.
CHAPTER 19: VENDETTA
“a massive document depository”: Jerold S. Solovy, interview by PD, December 16, 2008.
“a remarkable power grab”: Lexecon v. Milberg Weiss Bershad Hynes & Lerach, http://supreme.justia.com/us/523/26/index.html.
“We have a good rapport”: Alan Salpeter, interview by PD, December 4, 2008.
I’m taking on the most powerful: Ibid.
“We do not want to get”: William S. Lerach, interview by PD, January 22, 2009.
“Our worst fears”: Lauran Neergaard, “Secret Memo Shows R.J. Reynolds Targeted Teenagers,” Associated Press, January 15, 1998.
R.J. Reynolds CEO Steve Goldstone: Janet Mangini, interview by PD, November 24, 2008.
when the accounts were finally settled: Patrick Coughlin, interview by PD, April 16, 2008.
“hero”: Representative Henry A. Waxman, statement, January 18, 1998. 278
If they were to take a hit: William S. Lerach, interview by PD, January 22, 2009.
outsize bills from John Torkelsen: Peter Elkind and Doris Burke, “The King of Pain Is Hurting,” Fortune, September 4, 2000.
“Dave [Bershad] and I have decided”: William S. Lerach, interview by PD, April 15, 2008.
“There are people at the firm”: Ibid.
“Dave, I can’t do this”: Quoted in Elkind and Burke, “King of Pain Is Hurting.”
“Do you consider yourself” : Lexecon v. Milberg Weiss Bershad Hynes & Lerach, U.S. District Court, Northern District of Illinois Eastern Division, March 1 to April 14, 1999.
“the greatest perversion of justice”: Ibid.
Would the jury see through it?: William S. Lerach, interview by PD, April 15, 2008.
“Dan Fischel could look at a rainstorm”: William S. Lerach, interview by PD, January 22, 2009.
“You admit, do you not”: Lexecon v. Milberg Weiss Bershad Hynes & Lerach, U.S. District Court, Northern District of Illinois Eastern Division.
Judging from the looks: William S. Lerach, interview by PD, April 15, 2008. 287
Mel Weiss was seething: Ibid.
“So, over this period after 1990”: Lexecon v. Milberg Weiss Bershad Hynes & Lerach, U.S. District Court, Northern District of Illinois Eastern Division.
“There were such notes”: Ibid.
“Star, we are getting killed”: William S. Lerach, interview by PD, October 15, 2008.
She’d come as soon: Star Lerach, interview by PD, October 28, 2008. 290
“Mr. Lerach, you didn’t tell this jury”: Lexecon v. Milberg Weiss Bershad Hynes & Lerach, U.S. District Court, Northern District of Illinois Eastern Division. 292
“Would it help”: Alan Salpeter, interview by PD, November 25, 2008. 292
“We’re going to turn Lerach”: Ibid.
Salpeter contacted Judge Zagel: Lexecon v. Milberg Weiss Bershad Hynes & Lerach, U.S. District Court, Northern District of Illinois Eastern Division. 296
Salpeter decided to go for: Alan Salpeter, interview by PD, December 4, 2008. 296
Hansen and Salpeter continued working: Ibid.
“Dan, get real,”: Ibid.
“We got whacked”: William S. Lerach, interview by PD, April 15, 2008.
CHAPTER 20: FRAUD BY HINDSIGHT
written by Judge Sneed: Janas v. McCracken et al., Ninth Circuit Court of Appeals, Northern District of California, No. 97-16204, San Francisco, July 2,
1999. 299
“Congress intended”: Ibid.
“[Plaintiff’s] assertions”: Ibid.
“based upon the investigation”: Janas v. McCracken et al., U.S. District Court for Northern California, June 7, 1997.
“with particularity”: For Judge Sneed’s decision in Silicon Graphics, see Janas v. McCracken et al., Ninth Circuit Court of Appeals, Northern District of California, No. 97-16204, San Francisco, July 2, 1999.
“Congress plainly intended”: For Judge Browning’s dissent in Silicon Graphics, see ibid.
“It’s a blockbuster”: Quoted in Dan Goodin, “Securities Fraud Ruling Protects Tech Firms,” CNET News, July 6, 1999.
Lerach found the opinion: William S. Lerach, “A Tainted Decision,” internal memo, 2004.
Carly Fiorina: Peter Burrows, Backfire: Carly Fiorina’s High Stakes Battle for the Soul of Hewlett-Packard (New York: John Wiley, 2003), p. 229.
She was one of three children: Bob Egelko, “Judge Joseph Sneed Dies—Longtime 9th Circuit Judge,” San Francisco Chronicle, February 14, 2008.
“Guess which law firm”: William S. Lerach, interview by PD, April 16, 2008.
“Here’s how we got”: Ibid.
“A former Beverly Hills ophthalmologist”: Jeff Leeds, “Former Doctor Is Convicted in Art Fraud Case,” Los Angeles Times, July 21, 1999.
John Torkelsen stated under penalty: Amanda Bronstad, “Former Milberg Expert Pleads Guilty to Perjury,” National Law Journal, May 2, 2008.
the very crimes of self-dealing: “U.S. Files Suit Against John Torkelsen, Richard Propper, Daniel Beharry, & Sovereign Bank Alleging Fraud of $32 Million Against the Small Business Administration,” press release, U.S. Attorney’s Office, Philadelphia, December 29, 2006.
Either he would cooperate: Elkind and Burke, “King of Pain Is Hurting.”
The big three received: United States v. Milberg Weiss Bershad & Schulman LLP, David Bershad, Steven G. Schulman, Seymour Lazar, and Paul T. Selzer, U.S. District Court, Central District of California, May 18, 2006.
CHAPTER 21: LET’S MAKE A DEAL
The first signal: Richard Robinson, interviews by PD, June 2, 11, September 10, 30, October 31, December 10, 2008; January 21, February 2, 2009.
the Tuscan-style villa: William S. Lerach, interview with and personal observations by PD, April 14, 1997.
“This is really, really nice”: William S. Lerach, interview by PD, February 26, 2008.
his neighbor Gerald Parsky: Cullen Couch, “Gerald Parsky, ’68, Blends Politics and Principle to Achieve Reform,” University of Virginia Law Review, Spring 2007.
Lerach had been peeved: William S. Lerach, interview by PD, February 26, 2008.
Such thoughts would haunt him: Ibid.
what new developments: Ibid.
two strategic personnel acquisitions: For biographies of Paul Howes and Byron Georgiou see Coughlin Stoia Web site, http://www.csgrr.com/.
“for dirty bathrooms”: Paul Howes, interview by PD, January 15, 2009.
clear, coherent delivery: Robert McGahan, interview by PD, May 22, 2008.
“For more than ten years”: Richard Robinson, interview by PD, September 10, 2008.
Robinson was unmoved: United States. v. Milberg Weiss Bershad & Schulman LLP et al., U.S. District Court, Central District of California, May 18, 2006.
“He never did any work”: Richard Robinson, interview by PD, September 10, 2008.
Weiss had given him a check: United States v. Milberg Weiss Bershad & Schulman LLP et al., U.S. District Court, Central District of California, May 18, 2006.
then there could be a discussion: Richard Robinson, interview by PD, September 10, 2008.
a pattern should reveal itself: Ibid.
fraying and widening: Peter Elkind, “The Fall of America’s Meanest Law Firm,” Fortune, November 13, 2006.
that scene during: William S. Lerach, interview by PD, January 22, 2009.
“Listen, shit-for-brains,”: Robert McGahan, interview by PD, January 6, 2009.
Lerach was vexed: William S. Lerach, interview by PD, October 15, 2008. 316
stock Bershad’s credenza: Walter Olson, “Inside Milberg’s Credenza,” Wall Street Journal, May 22, 2006.
skim enough off the top: Douglas Axel, interview by PD, January 13, 2009.
his son Job needed $250,000: Robert McGahan, interview by PD, December 12, 2008.
eight more visits: Richard Robinson, interviews by PD, June 2, 11, September 10, 30, October 31, December 10, 2008; January 21, February 2, 2009.
Michael Emmick: For Michael Emmick biography, see http://www.lls.edu/academics/faculty/emmick.html.
dealt with Lewinsky personally: Monica Lewinsky interrogation, January 16, 1998, Transcription, Office of the Independent Counsel.
the ring of truth: Michael Emmick, interview by PD, February 25, 2009. 318
“I just loved”: Catherine Budig, interview by PD, February 15, 2009.
names kept repeating themselves: Richard Robinson, interview by PD, December 10, 2008.
Amalgamated Bank: In re: Enron Corporation Securities Litigation, The Regents of the University of California, et al., Individually and on Behalf of All Others Similarly Situated v. Kenneth L. Lay et al., U.S. District Court, Southern District of Texas, Houston Division, First Amended Complaint, May 14, 2003. 319
nearly $150 million: Christopher Patti, interview by PD, December 17, 2008.
John Zegarski: In re: Enron Litigation, U.S. District Court, Southern District of Texas, Houston Division, First Amended Complaint, May 14, 2003.
Enron insiders unloaded: Information regarding Enron’s impending collapse comes from four sources: United States v. Jeffrey K. Skilling, U.S. District Court, Southern District of Texas, Houston Division, Case no. 06-208885; Department of Justice, Government Exhibit no. 004469: “Schedules: Enron Earnings Release External Format and Forecast, January 25, 2001;” Enron Annual Report from 2000; and finally the unheeded warning sounded by business reporter Bethany McLean in her insightful piece “Is Enron Overpriced?” Fortune, March 5, 2001. 320
“These guys don’t quit”: William S. Lerach, interview by PD, February 26, 2008.
“Do you have a position in Enron?”: William S. Lerach, interview by PD, October 15, 2008.
“We’re going to take on”: Rebecca Clarren, “Paradise Lost, Greed, Sex Slavery, Forced Abortions, and Right Wing Moralists,” Ms. Magazine, Spring 2006.
“Start with arrogance”: Bethany McLean, “Why Enron Went Bust,” Fortune, December 24, 2001.
Milberg Weiss would accrue costs: Helen Hodges, Declaration in Support of Lead Counsel’s Motion for Attorney’s Fees, in re: Enron Litigation, U.S. District Court, Southern District of Texas, Houston Division, January 2, 2008.
CHAPTER 22: THE HUNTERS AND THE HUNTED
“It’s a smoking howitzer!”: Documentary, The Smartest Guys in the Room, Magnolia Pictures, April 23, 2005.
University of California: In re: Enron Litigation, U.S. District Court, Southern District of Texas, Houston Division, First Amended Complaint, May 14, 2003. 324
“They’ve been shredding documents”: Carrie Johnson, “Enron Auditor Admits Crime; Andersen’s Duncan Ordered Shredding,” Washington Post, May 14, 2002.
references to Jedi II: Paul Howes, interview by PD, January 15, 2009.
“Paul, I really don’t care”: William S. Lerach, interview by PD, February 15, 2009.
he called Christopher Patti: Paul Howes, interview by PD, January 15, 2009.
“Why don’t you come up”: William S. Lerach, interview by PD, February 27, 2008.
“They really managed”: Christopher Patti, interview by PD, December 18, 2008. 326
line up other plaintiffs: Ibid.
bank robbery: Tom Fowler, “Cooperation Could Pay Off for Fastow,” Houston Chronicle, September 26, 2006.
multicolored taxonomy: Christopher Patti, interview by PD, December 18, 2008. 327
“I am confident”: Ibid.
; a criminal grand jury: “Milberg Weiss Face Inquiry, Report Says,” New York Times, January 26, 2002.
still another war room: Richard Robinson, interview by PD, June 11, September 10 and 30, 2008.
a relatively lenient sentence: Timothy L. O’Brien and Jonathan D. Glater, “Robin Hoods or Legal Hoods,” New York Times, July 17, 2005. 328
how extensively Cooperman: Richard Robinson, interviews by PD, June 11, September 10 and 30, 2008.
“I think we’re almost”: Michael Emmick, interview by PD, February 25, 2009.
“David, you had nothing”: In re: United States v. Milberg Weiss, Bershad, Schulman, LLP et al., U.S. District Court, Central District of California, Bershad testimony.
put the documents in his safe: Ibid., Weiss guilty plea, March 20, 2008. 329
blueprint for a fraud case: Richard Robinson, interview by PD, June 11, September 10 and 30, 2008.
looking for lawyers testifying: Richard Robinson, interview by PD, February 29, 2009.
these chronologies: Robert McGahan, interview by PD, June 6, 2008. 330
“Mr. Lerach is getting”: Edward Iwata, “Law Firms Tussle over Enron Case,” USA Today, February 11, 2002.
Finberg’s plaintiffs’ losses: Flynn Roberts, “Lawyers Fight for Big Prize: Enron Lead Attorney,” Chicago Tribune, February 11, 2002.
“The only way this story”: Iwata, “Law Firms Tussle over Enron Case.”
“Regents presents itself”: Rosanna Ruiz, “Judge Names University as Lead Plaintiff in Enron Case,” Houston Chronicle, February 17, 2002.
“all hands retreat”: William S. Lerach, interview by PD, January 17, 2008.
“I’d get home late”: Alexandra Bernay, interview by PD, April 16, 2008.
“I’m a human being”: Andrew Longstreth, “A Dish Best Served Cold,” American Lawyer, October 1, 2005.
The image would depict him: Ibid.
“It made us nervous”: Peter Elkind, “The Fall of America’s Meanest Law Firm,” Fortune, November 3, 2006.
Parsky-Bush-Enron connection: Chris Thompson, “Parsky’s Party,” East Bay Express, May 9, 2007.
“I still have the power”: William S. Lerach, interview by PD, April 18, 2008.