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Already the subject of a grand jury investigation in Los Angeles, New York-based Milberg Weiss Bershad Hynes & Lerach is also facing scrutiny over its relationship with a high-ranking political figure in Philadelphia. Both state and federal authorities are looking into whether Philadelphia City Controller Jonathan Saidel received consulting fees from two law firms — one of which is Milberg Weiss — in exchange for helping the firms win city contracts. According to an internal Milberg Weiss e-mail obtained by The Recorder, a Pennsylvania grand jury has asked the firm for documents relating to Saidel, various Philadelphia public entities and the mother-daughter team that runs the firm’s Philadelphia office, Sandra and Laura Stein. “Note that this does not just include matters in which the firm represented any of these Philadelphia-related entities as clients, but also includes any matter, potential matter, and business development or marketing effort in which the firm communicated with these clients,” the e-mail reads, asking that information be sent to Milberg Weiss’ New York headquarters. “You should consider your efforts in responding to this memorandum … as one of your most immediate and pressing priorities.” The investigation does not appear to be related to a previously reported Los Angeles grand jury probe into Milberg Weiss’ business practices, including whether the firm paid referral fees to lawyers who steered business its way. Sandra Stein is well known in Republican political circles in Philadelphia. She joined Milberg Weiss two years ago after being hired away from Philadelphia’s Berger & Montague, a class action plaintiffs’ firm that often competes with Milberg Weiss. A spokeswoman for the firm did not return phone calls by press time. The lawyer representing the firm in the Philadelphia inquiry, Michael Baylson of Philadelphia-based Duane Morris, was out of the office Monday and could not be reached. Baylson is a former U.S. Attorney for the Eastern District of Pennsylvania. Washington, D.C.’s Williams & Connolly represents Milberg in the L.A. probe. The grand jury was empanelled by the U.S. Attorney’s Office, which hadbeen working in conjunction with state prosecutors. James Eisenhower, a partner with Philadelphia-based Ballard Spahr Andrews & Ingersoll, said Monday that Saidel had not been subpoenaed. Questions about Saidel’s relationship with Milberg Weiss and Philadelphia’s Silverman Bernheim & Vogel were first reported in the Philadelphia Inquirer. Sandra Stein reportedly gave Saidel $20,000 in the past two years to help secure clients. Silverman Bernheim & Vogel paid Saidel much more in fees, and the chairman of the firm, Lawrence Silverman, told the Inquirer Saidel’s compensation was linked to the amount of work he delivered on city bond issues. Saidel, a Democrat who was recently re-elected, denies any wrongdoing. The mother-daughter team of Sandra and Laura Stein established Milberg Weiss’ Philadelphia office when they were hired away from Berger & Montague in 2000. Milberg Weiss’ Web site describes the Steins, respectively listed as of counsel and an associate, as experts in “maximizing profits and minimizing losses to shareholders.” Milberg Weiss is the most litigious private securities class action firm in the country. Saidel reportedly said he had worked with Berger & Montague before the Steins jumped to Milberg Weiss. He said the firm hired him to talk to leaders of local union pension funds rather than work on helping it secure city business. The city has not hired Milberg Weiss. In written responses reported by the Inquirer, Melvyn Weiss denied that Milberg Weiss paid Saidel anything, while Sandra Stein denied asking him to drum up city business. Stein also runs the nonprofit Institute for Law and Economic Policy, which shares a Philadelphia address with Milberg Weiss. The group holds annual conferences that draw some of the biggest names in the field of private securities litigation as panelists.

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