As Bill Lerach gets ready to don his prison uniform and start serving a two-year prison sentence, some Washington lawmakers are calling for an investigation into the practices of the securities class action litigation industry.
Lerach, involved in a plaintiff kickback scheme at his former firm, Milberg Weiss, told The Wall Street Journal that his illegal conduct and that of his law partners was an "industry practice," House minority leader John Boehner (R-Ohio) and Lamar Smith (R-Texas) wrote in letters to the chairman of the House judiciary committee, John Conyers Jr. (D-Mich.), and to House majority leader Nancy Pelosi (D-Calif.).
"If in fact the crimes committed by Mr. Lerach and his colleagues are an 'industry practice,' as Mr. Lerach himself confessed, then the United States Congress is sitting idle while criminal behavior in the trial lawyer industry threatens American jobs and feeds like a parasite on the prosperity of working families," they wrote.
Boehner and Smith ask for answers to three questions:
How many cases are brought as a result of illegal payments to plaintiffs, what other types of conflicts exist between trial lawyers and the injured investors they "purport to represent," and what reforms Congress can enact to erase these abuses from the judicial system.
They ask that a hearing be scheduled by May 19 -- the date Lerach is ordered to report to prison.