Securities Regulation and Litigation Lawyer & Attorney : OverRegd Blog : Lindquist & Vennum Law Firm, Minneapolis and Denver

Plaintiff class action law firm heavyweights Milberg Weiss and Bernstein Litowitz are now squaring off, against each other, to determine which one gets to be lead counsel in a class action suit alleging that Merck defrauded investors about the risks of Vioxx. 

In October, Bernstein filed a motion arguing that its client should be allowed to intervene in the Merck litigation because Milberg had neglected to inform the court that it had been fired by its clients. Bernstein also noted that Milberg was indicted in May for allegedly sharing legal fees with class action clients in other cases (allegations that Milberg has denied). Milberg quickly countered, asserting that it had spent thousands of hours on the case and that Bernstein’s motion was nothing more than a belated attempt to grab for itself the counsel leadership of the case.

Regardless of which firm prevails, this appears to be yet another example of the unflattering public squabbles over  becoming lead counsel.  

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One of the endless frustrations experienced in working through the Byzantine auspices of the NASD-DR is the marked reluctance of the organization to actually exercise its powers, and render a decision on procedural issues pertaining to claims in arbitration. These types of issues seem to arise with increased frequency, and may require the staff of the NASD-DR to actually enforce and uphold the Code of Arbitration Procedures. Yet, with extraordinary regularity and deftness, the staff avoid making a decision, even if the outcome would appear to be pre-ordained by the underlying rules relating to arbitration. Rather than enforce these rules, however, we hear the refrain “we will refer it to the panel for consideration,” even if to do so eviscerates the underlying motion and renders it meaningless or, worse, creates the potential for arbitrator hostility towards a party. Why is the staff so religiously reluctant to take a position? What can we do about it?

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For the most comprehensive and interesting detail to date on the federal government’s criminal investigation of Milberg Weiss, check out  this article by Fortune’s Peter Elkind -

The fall of America's meanest law firm

(thanks to my former partner Bill Michael for sending this our way).

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SEC Chairman Christopher Cox posted an official communication to a blog last week, stating that he was intrigued by the idea of letting companies use Weblogs to disseminate important corporate information.

In late October, avid blogger Jonathan Schwartz, the chief executive of Sun Microsystems Inc., posted an open letter on his blog to Chairman Cox, encouraging the SEC to look to the Internet to achieve the SEC's objectives of greater investor access to information. Last week, Chairman Cox responded by posting a comment on Schwartz’ blog, inviting Schwartz to talk with the agency about the idea of allowing companies to disclose significant financial information through blogs. 

A growing number of major companies, including at least thirty Fortune 500 companies, are now publishing corporate blogs, nearly double the number in December 2005, according to the Fortune 500 Blogging Wiki, a collaborative tracking site.

Currently, one of the main impediments to the use of blogs for the disclosure of financial information is Regulation FD, which requires companies to use a method for disseminating financial information that is “reasonably designed to provide, broad nonexclusionary distribution of the information to the public.” One question Chairman Cox and the SEC must entertain is whether blogs meet the “widespread dissemination” requirement.   

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The North American Securities Administrators Association (NASAA) reports that authorities are investigating cases in which hackers obtain access to customers’ accounts at large online brokerage firms and then buy penny stocks in those accounts as part of a “pump and dump” scheme. NASAA states that these incidents are costing customers millions. It is unclear how the hackers are obtaining the customers’ passwords and user names. NASAA warn investors to take prudent precautions to safeguard against identity theft, and to carefully monitor their accounts for unauthorized activity.

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