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Boston �� A Massachusetts federal judge ruled that last year’s indictment of Milberg Weiss & Bershad and two of its lawyers and the firm’s conduct during a proposed securities class action case meant the firm was “not adequate” lead counsel. In his March 15 order, Judge Joseph L. Tauro also denied class certification in the case against former executives and board members of Canton, Mass.-based skin substitute maker Organogenesis Inc. Organogenesis has since become a private company after investors bought it out of bankruptcy. In In Re: Organogenesis Securities Litigation, No. 04-10027 (D. Mass.), Tauro’s memo took issue with a Milberg Weiss letter to the court stating that no attorneys litigating the case were indicted. Indicted lawyer Steven Schulman had filed the amended complaint and signed the engagement letters of the lead plaintiffs before his withdrawal from the firm. “This court is not the first court to analyze the terms of this letter from Milberg Weis and to find ‘such fine shading of words’ disturbing,” Tauro wrote. “The court cannot ignore the fact that by virtue of the indictment Milberg Weiss is a different firm than it once was.” In May, 2006, the then-named Milberg, Weiss, Bershad, and Schulman and two former partners were indicated by a federal grand jury for fraud and obstruction of justice for making illegal payments to plaintiffs in securities class action cases. Tauro found that one of the two remaining potential lead plaintiffs did not lose money using the accounting method preferred by courts, and the other’s claims could not represent a class because his claims were atypical of other investors. Tauro also took the firm to task for filing erroneous certifications of plaintiffs’ stock trading records. “The failure to adequately check the records and properly oversee the process is evidence that the court will consider while assessing the adequacy of Milberg Weiss’ performance in the present litigation,” Tauro wrote. The problems with plaintiffs’ affidavits distinguishes the Organogenesis case from others where Milberg Weiss was denied lead counsel said lead defense attorney Jonathan Shapiro, a Boston-based partner at Wilmer Cutler Pickering Hale and Dorr. “[It's] not just problems represented by indictment,” Shapiro said. “In this case court concluded that Milberg failed to demonstrate it was an adequate lawyer for a class of investors.” Tauro’s memo also expressed concern that Milberg Weiss and its lawyers could be distracted by its pending criminal trial in January 2008. Milberg Weiss did not respond to requests for comment.

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