July 15, 2024

DealBook: Trying to Get Back in the Game

Daniel Rosenbaum for The New York TimesAt the American Constitution Society convention in Washington, Melvyn Weiss, center, with Representative John Conyers Jr., a Michigan Democrat, left, and Ariana Stowe, an intern.

WASHINGTON — Several dozen of the nation’s top corporate lawyers convened at a conference here last week to discuss the future of securities litigation.

In years past, Melvyn I. Weiss would have played a central role in the debate.

But while the lawyers argued about Wall Street reform and the latest Supreme Court ruling, Mr. Weiss sat on a panel down the hall, speaking about his time in prison.

When a moderator called him “attorney Weiss,” he quickly corrected her.

“Former attorney Weiss,” he said, a poignant half-smile breaking out across his face.

Mr. Weiss lost his license to practice law when he pleaded guilty in 2008 to making illegal kickback payments to his clients. He spent a year in prison, another four months in a halfway house, and is now on probation for three years.

And though he is disbarred, Mr. Weiss wants to get back in the legal arena. He has mailed letters in recent weeks to about 200 of his former colleagues seeking work as a mediator.

“Despite the upheavals in my own life, I am happy to report that my body and spirit are in great shape, and I am motivated to be as productive as ever,” wrote Mr. Weiss, 75, on letterhead from his new business, MIW Mediating and Consulting.

Citing his experience as a court-appointed mediator and decades of practicing law, Mr. Weiss wrote, “Bottom line, I am available to mediate or arbitrate significant disputes.”

Mr. Weiss has spent his career in the middle of significant disputes. He and his partners at Milberg Weiss Bershad Hynes Lerach revolutionized shareholder class-action lawsuits, filing streams of cases against corporations accusing them of accounting fraud and other wrongdoing. Most of the companies settled rather than undergo costly litigation, earning the firm hundreds of millions of dollars in legal fees.

The firm’s aggressive tactics made it the bête noire of corporate America. Business groups called Milberg Weiss’s lawsuits a legal form of extortion. Congress passed a law in 1995 aimed squarely at its practices.

In 2006, Milberg Weiss was indicted on charges of secretly paying clients millions of dollars in illegal kickbacks to serve as plaintiffs in about 180 cases over 25 years. Mr. Weiss and three of his partners went to prison. His former firm, now called Milberg, paid $75 million to settle its role in the case.

No one has yet to hire Mr. Weiss as a mediator, and he said that he realized that his baggage presented a challenge for his fledgling business. Yet he is serious about the venture — last summer, he took a weeklong arbitration course at Pepperdine University School of Law.

Can a disbarred lawyer serve as a mediator?

Most legal experts say that there is no problem with Mr. Weiss acting in that role; after all, nonlawyers can act as mediators. Sol Wachtler, the former New York judge who lost his law license in 1993 after pleading guilty to a harassment crime, acted as a mediator before being reinstated to the bar a few years ago.

But Bruce Green, a legal ethics professor at Fordham University, says he believes that Mr. Weiss could be acting inconsistently with his disbarment order.

“I am not so confident that it is permissible for a disbarred lawyer to serve as a mediator and expressly draw on his prior legal experience, as Mr. Weiss appears to be doing,” Mr. Green said.

Mr. Weiss, the Bronx-born son of an accountant, would not be mediating for the money. During the years 1983 through 2005, Mr. Weiss’s share of his firm’s profits totaled about $210 million, according to court filings. (As part of his penalty, he paid a $10 million fine.)

He splits time between a waterfront mansion in Oyster Bay Cove, N.Y., and a luxury condominium in Boca Raton, Fla.

Yet financial clouds loom. While in prison, Mr. Weiss learned that a chunk of his savings had been wiped out in the Bernard L. Madoff Ponzi scheme. The Madoff bankruptcy trustee then sued Mr. Weiss, his family and a former law partner claiming that they earned $20.4 million in fake profits from the fraud that had to be returned to the victims.

Mr. Weiss declined to comment on the lawsuit.

He is also locked in arbitration against his former law firm, which wants Mr. Weiss to compensate the firm for the tens of millions of dollars in legal fees it spent defending itself.

During his talk, Mr. Weiss did not address those personal problems. Instead he focused on the issues faced by his fellow inmates.

“The advice I got from most of my friends was, Why do you want to dwell on the criminal part of your life?” said Mr. Weiss, addressing a crowded room at the American Constitution Society convention.

“How could I go through that experience with my 50 years of legal practice and not try to do something about it? So that’s why I’m here.”

He decried the conditions at his halfway house, a “decrepit Salvation Army building” in West Palm Beach, Fla., that he complained had one small television with rabbit ears, basketballs that didn’t bounce and patio furniture that was falling apart.

“I walked into this environment and said ‘How is this supposed to be a transition into society?’ ”

He expressed frustration that he could not help his fellow prisoners because his probation prohibits him from having contact with felons.

That rule prevents him from speaking with William S. Lerach, his former protégé and law partner. Mr. Lerach, who ran the West Coast operation of Milberg Weiss and brought in many of the firm’s largest cases, also served prison time. Despite a bitter split in 2004, he expressed warm feelings for Mr. Weiss.

“I admire his decision to work again and think he could be enormously useful to the system as a mediator,” Mr. Lerach said.

But the 65-year-old Mr. Lerach, who has written some opinion articles and lectured at law schools since leaving prison, said he had no interest in such commercial pursuits.

“I had a lifetime of work and these days I’m just puttering along,” said Mr. Lerach, who lives in a mansion in La Jolla, Calif., perched on a cliff overlooking the Pacific Ocean. “I’d rather tend to my garden. Right now I’m harvesting blueberries and boysenberries.”

Mr. Weiss does not garden, and while he golfs, having kept country club memberships on Long Island (Glen Oaks) and in Florida (Boca Rio), he said he was not wired to live a life of leisure.

“Some guys work all their lives and then can turn off the spigot,” said Mr. Weiss, who has a wife, three children and seven grandchildren. “They play golf in the morning, gin rummy in the afternoon, go to dinner with their wives at night and that’s it. That’s not me.”

After his talk here on Friday, Mr. Weiss milled about the conference, thrilled to be back in the game. A judge from Iowa introduced himself and said that he once presided over a life insurance marketing fraud case brought by Mr. Weiss. One of his former Milberg partners came over to say hello.

A top plaintiffs’ lawyer gave him a warm welcome; they agreed to have dinner with their wives when they returned to New York.

Down the hall, a lawyer who tried cases with Mr. Weiss marveled at his onetime colleague holding court. “He was a terrific lawyer; I loved trying cases with him,” said the lawyer, who would only be quoted on the condition of anonymity.

“But he also made serious mistakes and disgraced our profession. It’s a mixed bag with Mel.”

Article source: http://feeds.nytimes.com/click.phdo?i=814fae3ce6100b3e75e956a992ae3791

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