Referring to the kickback issue at the heart of the federal government’s case against Milberg Weiss as “a cancerous growth” and an “economic threat” that threatens American jobs, two high-ranking Republican Congressmen have called on House Judiciary Committee Chairman John Conyers Jr., D-Mich., to set a hearing to investigate the pervasiveness of such unethical conduct among trial lawyers.

John Boehner, R-Ohio, and Lamar Smith, R-Texas, said the hearing should take place before May 19, when plaintiff’s securities lawyer William Lerach, a former partner at Milberg Weiss, is scheduled to begin serving a two-year prison sentence. Lerach pleaded guilty earlier this year to one count of conspiracy in a case alleging that his former firm, now called Milberg, and seven of its partners, including himself, obtained $250 million in attorney fees by paying kickbacks to lead plaintiffs. 

A May 2 letter submitted to Conyers, Boehner and Smith said that Lerach has admitted his crime was “industry practice” and that federal securities class actions cases are filed four times more often than other federal class actions. The letter also states that international employers are discouraged from employing workers in the United States because of the threatening legal climate “The Republican-led Congress responded aggressively to the Enron and WorldCom scandals earlier this decade,” the letter says. “Now the Democrat-led Congress needs to do its job and examine the scandal at Milberg Weiss, which potentially has deeper and more far-reaching implications.” Specifically, the letter asks Conyers to investigate how many cases involve illegal payments to plaintiffs, what other types of conflicts exist between lawyers and investors and what reforms should be undertaken to remedy the wrongdoing.

A copy of the letter was sent to House Speaker Nancy Pelosi, D-Calif.

A call to Conyers was referred to a spokeswoman for the House Judiciary Committee who did not return a call for comment.

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