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Circle of Greed Author Visits USF

April 29, 2010

Award-winning journalist Patrick Dillon spoke to students and faculty April 8 about his new book Circle of Greed: The Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to its Knees, which he co-authored with Carl M. Cannon. The event was sponsored by the Center for Law and Ethics.

"Patrick Dillon is an extraordinarily accomplished journalist, a winner of the Pulitzer Prize, an acclaimed author..., (and) an experienced editor," said Professor Joshua Davis, director of the Center for Law and Ethics. "(His book) is a riveting tale about how Bill Lerach, one of the most famous attorneys in this country, rose to the heights of power, fame, and wealth only to end up in jail."

Circle of Greed follows William S. Lerach from his first class-action case in 1977 to his fall three decades later when he was sentenced to two years in prison, ordered to perform 1,000 hours of community service, and required to pay a $250,000 fine for his misconduct.

"What we have here really is a conflict between the law and some degree of humanity, a person who thought perhaps he was too big or too moral too fail," Dillon said.

Patrick Dillon

Throughout his career, Lerach represented plaintiffs in a multitude of class-action suits that brought him and his firm Milberg Weiss Bershad Hynes & Lerah up against major corporations, including Enron, Disney, CitiBank, and Hewlett-Packard, and resulted in more than $45 billion in fraud judgements or settlements for his clients. Lerach was so successful that Congress passed the 1995 Private Securities Litigation Reform Act (PSLRA) in part to address his dominance in the field.

"The final version contained a series of provisions aimed directly at Lerach and his firm," Dillon and Cannon wrote in Circle of Greed. "These provisions revealed their critics' suspicions about how Milberg Weiss got so many clients: the PSLRA prohibited some types of referral fees, set limits on the number of claims that named plaintiffs could file, barred shareholders from buying stock specifically so they could sue, and forbade members of the class from receiving payments disproportionate to their share of the recovery."

Davis explained at the April event that despite the passage of the PSLRA, Lerach's share of the market increased.

"Turns out that the reason he was so good at getting clients, at least part of the reason, was even though it is now illegal, and unethical, to share your fees on a contingent basis with your clients, especially in a class action, he was doing that," Davis said. "And he was doing it with some relatively large investors. Literally money in brown paper bags changed hands."