As Marc Dreier, the sole equity partner of Dreier LLP, faces federal charges of transferring $113 million in bogus securities to two hedge funds, an impersonation charge filed against him in Toronto as well as a lawsuit filed by the Securities and Exchange Commission to recover the $113 million, the firm he created, namely Dreier LLP, sits in receivership pursuant to the order of United States District Court Judge for the Southern District of New York Miriam Goldman Cedarbaum and faces an additional civil suit filed in the Southern District by Wachovia Bank alleging that the firm and Dreier himself defaulted on a $9 million revolving credit note made in connection with a $14.5 million credit agreement and a term note in the amount of $5.5 million.
As for the 238 attorneys whom until recently comprised Dreier LLP, only those with either substantial portable business or experience in counter-cyclical areas such as bankruptcy, white collar criminal defense and employment law will find refuge on other legal ships still riding out this storm. Our advice to Dreier LLP’s remaining associates and “partners” (none of whom shared with Mr. Dreier in either the firm’s equity or management) is to hang a shingle or better yet, explore opportunities in fields entirely apart from the practice of law which, even before the current economic crisis, was already glutted to the point of creating an entire industry of temporary attorneys whose sole occupation is to review mind-numbing documents for paltry wages in sweatshop-like conditions often under the auspices of the world’s most reputable and prestigious firms.
We at Hanover Legal would like to offer our special condolences to those attorneys who were so ill-fated as to land at Dreier LLP in the fog of the Milberg indictment two years ago, memorialized in part in a Wall Street Journal blog posted on August 18, 2006 as follows: “The bleeding continues at Milberg Weiss Bershad & Shulman. This week, four partners — Bruce Bernstein, Brian Kerr, Dan Scotti and Lee Weiss — announced they were leaving. The lawyers are heading to New York’s Dreier LLP which represents defendants and plaintiffs in securities litigation. The news was confirmed by Marc Dreier, the firm’s managing partner, who says the Milberg transplants will create a class-action group for their new firm. ‘Primarily, they will look for opportunities to do plaintiffs work,’ he says. The four attorneys did not return calls for comment. Since its indictment in May, Milberg has lost more than a dozen partners out of a previous total of 46. Melvyn Weiss did not return a call for comment, and a firm spokeswoman did not offer a comment today.”
It is sad to think that the Milberg and Dreier embarrassments may only scratch the surface of the securities related fraud and other improprieties involving members of the New York legal community over the last few years, each playing their small but ignoble parts in the fiascos of the New York, American and global economies.