Lerach was a partner at Lerach, Coughlin, Stoia, Geller, Rudman & Robbins of San Diego when he was indicted. The kickback payments reportedly took place previously, when he was a name partner at the law firm now known as Milberg Weiss.
Disbarred attorney Bill Lerach consults on case alleging hedge funds mismanaged Kentucky pensions
Bill Lerach, the disbarred California lawyer who won billions in private securities class-action lawsuits before pleading guilty in 2007 to a kickback conspiracy, is reportedly now doing consulting work for his wife, an attorney suing investment groups in Kentucky state court.
Michelle Ciccarelli Lerach is arguing that investment groups passed off unsuitable investments on the state’s pension fund, which did not approach or exceed the 7.76 percent interest rate that the pension fund portfolio sought, the Financial Times (sub. req.) reports.
The Kentucky pension plan invested $1.5 billion with hedge fund divisions of KKR, Blackstone and Paamco in 2011, according to the article. The state has one of the worst pension fund deficits in the country, with the Kentucky Employee Retirement System going from a $2 billion surplus at the end of 2001 to a $27 billion deficit in 2018, the suit says.
Kentucky’s state budget director conducted a pension reform review in 2016 and 2017, and changes to the pension system passed by the state legislature are involved in litigation set to come before the state supreme court this week, the Messenger-Inquirer reports.
The defendants in the hedge fund suit protested Bill Lerach’s involvement and requested that he be blocked from participation, the Financial Times reports, but the judge rejected their argument in May, saying that the court “may reconsider these issues in the future if circumstances warrant a re-examination of the allegations of unwarranted practice of law.”
If the lawsuit is successful, the couple could pursue clawback lawsuits regarding pensions in other states.
The Financial Times reports that Bill Lerach runs Pensions Forensics LLC. The consulting firm’s website says it “provides investigative expertise, and economic analysis and consulting services to determine the source and nature of pension fund financial and actuarial problems, including funding shortfalls, investment losses and fiduciary mismanagement.” Lerach’s bio on the website reports his disbarment and that he was the subject of the 2010 book Circle of Greed: The Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to Its Knees, but does not discuss his prison sentence.
In 2007, Lerach pleaded guilty to paying kickbacks to lead plaintiffs in his lawsuits, which reportedly earned him and his law partners more than $200 million in fees. In 2008, he received a two-year sentence, with a fine of $8 million. California disbarred him in 2009, according to its state bar website.
Lerach was a partner at Lerach, Coughlin, Stoia, Geller, Rudman & Robbins of San Diego when he was indicted. The kickback payments reportedly took place previously, when he was a name partner at the law firm now known as Milberg Weiss. Michelle Ciccarelli Lerach was also an attorney with the firm. Mel Weiss, Bill Lerach’s former law partner, pleaded guilty to racketeering in 2008. He died in February, the New York Times reported.
With defendants including Enron, Seagate Technologies and Time Warner, Lerach reportedly took in more than $100 million in fees between 1989 and 2000. When he was released from prison in 2010, the San Diego Metropolitan reported that Lerach moved into a California home valued at $24 million and his wife ran a cupcake shop, according to the article.