In a three-decade career, California lawyer William S. Lerach won tens of billions of dollars for his clients by suing executives in corporate scandals. Casting himself as the voice of victimized shareholders, he won unprecedented awards in the Enron accounting mess and the Exxon oil spill, says the Washington Post. His victories spawned a nationwide legion of imitators, who adopted his quick-draw tactics and bombastic rhetoric, transforming what was once a backwater, class-action investor lawsuits, into one of the most lucrative sectors of the legal business. That success inspired Congress to pass a 1995 law imposing limits on shareholder cases.
Lerach, 61, is headed to prison for at lest one year. Yesterday, he agreed to pay fines and penalties of $8 million and to plead guilty to a charge of conspiracy to obstruct justice. The deal ends a seven-year investigation into allegations that he and his former law firm secretly paid people to serve as plaintiffs. The Post says his conviction could cast a pall on plaintiff lawyers, whose tactics have come under government scrutiny around the nation. Lerach’s troubles have touched off a battle among firms seeking control of cases related to the debacle in subprime mortgages, home loans extended to people with flawed credit.