New York comptroller to dump law firm in Baycol suit

By William Murphy

Published on June 06, 2006

The law firm had been serving as lead counsel in the case, representing New York's public employee pension fund in a shareholder suit against Bayer over alleged misrepresentations of the safety of its cholesterol-reducing drug Baycol. Hevesi controls the $141 billion fund and as lead plaintiff alleges that drug maker's actions caused the fund to lose $22 million through investments.

Milberg Weiss Bershad & Schulman and two of its partners were indicted on May 18 in Los Angeles for mail fraud, money laundering, and conspiracy. The firm allegedly paid kickbacks to entice people to become plaintiffs in securities class action lawsuits.

Millberg Weiss has denied any wrongdoing, but several partners and lawyers have already left the firm in anticipation of adverse judgments. Even if it is vindicated, many say that the firm is tainted and will have difficulty fielding new cases.

Hevesi characterized past representation by Millberg Weiss as "outstanding," but says that given the current indictments he feels compelled to replace the firm and bar it from representing the pension fund in the future.

Comment on this article →