Tuesday, February 12, 2008
GOP Congressman Seizes On Lerach Sentencing To Highlight Securities Bill
Rep. Jeb Hensarling, R-Texas, intends to re-introduce legislation today that would reform class securities legislation.
His timing, just a day after William Lerach, formerly of securities class action firm Milberg Weiss, was sentenced to two years in prison (subscribers can see the Daily Journal's print edition for the full story), is not coincidental.
The firm imploded after allegations that it gave kickback payments to some of its clients.
Lerach is the latest former partner to plead guilty in relation to the investigation.
It's not likely that Hensarling's bill, the Securities Litigation Attorney Accountability and Transparency Act, will make much of a dent in a Democratic-controlled Congress.
Former Rep. Richard Baker, R-La., who recently resigned from Congress, had championed a version of the bill in the 109th Congress and failed to make any progress, even when Republicans were in charge.
He also introduced the bill in the current Congress before he resigned.
But Hensarling, pictured right, backed by the U.S. Chamber of Commerce, obviously saw the Lerach sentencing as a good opportunity to highlight the issue.
The bill would require plaintiffs attorneys working on securities cases to disclose payments, fees, and political contributions, among other things.
"Recent, well-documented, cases of abuse in this arena have underscored the necessity of such legislation, and it is my hope that the provisions contained in this bill will restore shareholders’ faith that the days of jackpot justice fraud are over," Hensarling said.
Incidentally, the reason Baker left Congress was to to take up a lucrative post at the Managed Funds Association.