William Shannon Lerach (Bill Lerach) (b. March 14, 1946, Ohio River Valley,[1] Midwestern United States) was an American lawyer who specialized in class action lawsuits before pleading guilty to obstruction of justice charges in 2007. He was appointed by President Clinton to the U.S. Holocaust Memorial Council in 1998.[2] The $7.12 billion he obtained in the case against Enron is currently the largest sum ever recovered in a group of securities class-action lawsuits in U.S. history.[3] About 75% of the class action suits filed and led by Lerach involved insider trading, stock fraud and stock manipulation. Over the course of his legal career, Lerach recovered approximately $45 billion on behalf of defrauded shareholders. Lerach pled guilty to one count of obstruction of justice and began a two year prison sentence in 2007. He was disbarred in 2009. Lerach was a major Democratic donor for many years.[4] His case and sentencing were presided over by US District Court Judge John F. Walter, nominated to the bench by President George W. Bush in 2002.[5]
For over 30 years, Bill Lerach was one of the leading securities lawyers in the United States. He headed up the prosecution of hundreds of securities class and stockholder derivative actions which resulted in billions of dollars of recoveries for defrauded shareholders of Wall Street banks, major accounting firms, corporations and insurance companies. Lerach was the subject of considerable media attention and a frequent commentator on economic and political matters and securities and corporate law.
Lerach was involved in many of the largest and highest profile securities class action and corporate derivative suits in recent years, including Enron, Dynegy, Qwest, WorldCom, Citibank, Drexel Burnham, Tyco, Merrill Lynch, Bank of America, Disney, Goldman Sachs, Credit Suisse First Boston, Global Crossing, AT&T, Hewlett-Packard, Apple Computer, ExxonMobil, R.J. Reynolds, Arthur Andersen, and AOL Time Warner. For more than two decades, he and his then firm Milberg Weiss (called by many “the meanest law firm in the country”) threatened, shook down and sued top Fortune 500 companies, recovering more than $45 billion in ill-gotten gains from corporations and banks on behalf of shareholders defrauded at a time when wealth in America had reached unprecedented heights and corporate scandals involving fraud, deception and insider trading were running rampant.
Lerach achieved enormous victories in suing some of the largest names in American business and was hot on the heels of Halliburton and its then CEO Dick Cheney, the Vice President of the United States, when he fell from grace.[6] Lerach had turned his sights on Halliburton and Cheney, the former CEO. In Lerach's lawsuit against Halliburton, he argued that Cheney had fled the company just ahead of the stock collapse, finding refuge in the White House. The attorney was in a position to subpoena and demand public testimony from the vice president, and he doubted that Cheney would be able to successfully hide behind a claim of executive privilege.[7]
Lerach's on-camera comments were prominently featured in the Oscar-nominated 2006 documentary about the monumental collapse of the 7th largest corporation in the U.S., “Enron: The Smartest Guys in the Room.” For years he was listed among the “Best Lawyers in America.” Mr. Lerach frequently lectured on class and derivative actions, accountants’ liability, and attorneys’ fees, and has been a guest lecturer at Harvard Law School, Stanford Univ Law School, Univ of San Diego Law School, UCLA Law School, the Council of Institutional Investors and the International Corporate Governance Network.
Lerach has testified before federal and state legislative committees concerning corporate governance and securities matters and is frequently quoted in the national media regarding corporate issues. He has published numerous articles and op-ed pieces, including "Achieving Corporate Governance Enhancements Through Litigation,[8]" keynote address to the Council of Institutional spring Meeting, March 27, 2001; "Why Insiders Get Rich, and the Little Guy Loses," LA Times, Jan 20 2002; "The Alarming Decline in the Quality of Financial Reporting;[9]" "The Chickens Have Come Home to Roost: How Wall Street,the Big Accounting Firms and Corporate Interests Chloroformed Congress and Cost America's Investors Trillions";[10][11] "The Average Joe Deserves a Bailout,"[12]; "Loser CEOs, Raking It In,[13]" Washington Post, Nov 11 2007; "Always an Insider's Game," AP Jan 6 2008 and "What About the Rest of Us? Bailout Fails to Help the Little Guy," Pittsburgh Post-Gazette, Mar 23, 2008. Mr Lerach has addressed the Take Back America Convention in Washington DC. Highlights of his speech and comments are included in the book, "Taking Back America-and Taking Down the Radical Right" by Robert Borosage and Katrina vanden Heuvel(2004), Chapter 11 "Holding Corporations Accountable" which was adapted from Lerach's Commencement Address delivered at the University of Pittsburgh Law School.[14]
Lerach earned his undergraduate and law degrees from the University of Pittsburgh. He gave the May 2003 Commencement Address "American Law: Instrument of Social Progress or Weapon of Repression?" at the Univ of Pittsburgh Law School.[14] The University of Pittsburgh bestowed one of its highest awards on Mr. Lerach, designating him a "Legacy Laureate" reserved for the University's most outstanding graduates.He has been a major financial donor to Democratic Party organizations at the state and national level.[15][16] In 1993, Lerach was cited in a Forbes magazine article stating that "I have the greatest practice of law in the world, I have no clients."[17] In law, a class action or a representative action is a form of lawsuit where a large group of people collectively bring a claim to court and/or where a class of defendants are being sued.
In August 2002, The Nation magazine published a cover story by William Greider featuring Lerach with the title, "Is This America's Top Corporate Crime Fighter?" [18]
On a televised PBS broadcast, Lerach was part of a panel to discuss accounting fraud, corporate misconduct and securities laws and regulations on the program, "NOW with Bill Moyers" on at least two occasions, September 27, 2002 [19] and November 21, 2003 [20]
Before leaving his law practice in August 2007 to focus on an ongoing criminal investigation, Lerach was a partner in the San Diego, California based firm, Coughlin Stoia Geller Rudman and Robbins, now known as Robbins, Geller, Rudman and Dowd. He had formed the firm in 2004, after leaving the firm of Milberg Weiss, which was subsequently indicted.[21][22][23]
According to a June 2007 statement in which he alluded to the ongoing Milberg Weiss investigation,[24][25][26] Lerach was considering retirement. As of August 31, 2007,[27][28][29] Lerach is no longer a member of the San Diego firm, which is now known as Coughlin Stoia Geller Rudman & Robbins LLP.[30]
Lerach pled guilty to one felony count of conspiracy to commit obstruction of justice and making false declarations under oath.[31] On Monday February 11, 2008, Lerach was sentenced to two years in federal prison,[17] two years' probation, fined $250,000, and ordered to complete 1,000 hours of community service because of his involvement in a kickback scheme.[32] He served his sentence at the Federal Correctional Facility Safford located in Arizona. The final two-and-a-half months were spent in home confinement following stints in the Arizona federal prison and a halfway house in San Diego.[33] His license to practice law was suspended in December, with disbarment expected.[34] On March 12, 2009, Lerach was disbarred by the California State Bar.[35] He was officially released from custody on March 8, 2010.[36] Lerach's former Milberg Weiss partner Melvyn Weiss was similarly sentenced in early June 2008.[37]
In an interview following his release, Lerach offered his thoughts and opinions about possible political motivation, the timing of his prosecution and generally-accepted legal practice regarding lead plaintiffs in class action lawsuits.[38][39]
In March 2010, a book about Lerach's life and career was published. "Circle of Greed: The Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to its Knees"[6] was researched and written by Pulitzer Prize-winning journalists Patrick Dillon and Carl M. Cannon, who had followed Lerach's career for many years when employed by the Copley Press. Although the title suggests that the book is critical of Lerach, it is not entirely unsympathetic. The writers hardly soft-pedal Bill Lerach’s crimes or his rough edges. Lerach is on record as telling other journalists that he thought Dillon and Cannon were tough, but fair. Lerach fully cooperated in the writing of the book without asking to see the manuscript before it was published in its final form. Dillon and Cannon interpreted Lerach's willingness to let the chips fall as they might demonstrated a gutsy pragmatism and a confidence in his own story that they could not help but admire.[40]
While testifying in Congress in 1995 against the passage of the Private Securities Litigation Reform Act (part of Newt Gingrich's Contract with America) which Congress passed by over-riding the veto of President Clinton, Lerach issued an eerily prescient warning at the hearing: "In 10 or 15 years you will be holding another hearing about a debacle in the securities market that will make you remember the S&L mess with fondness."[41]