Milberg Sued for $54 Million for Allegedly Conspiring With Expert Witness in Securities Fraud Case

Milberg Sued for $54 Million for Allegedly Conspiring With Expert Witness in Securities Fraud Case - 3-26-2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

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Milberg Sued for $54 Million for Allegedly Conspiring With Expert Witness in Securities Fraud Case
Ben Hallman

The American Lawyer. March 26, 2009
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EXCERPT: Wednesday was a good news/bad news day for the plaintiffs firm Milberg. Despite the firm's legal woes (hint: the name on business cards was once much longer), the firm won $253 million in securities class action settlements last year, according to data supplied by Securities Class Action Services, a unit of RiskMetrics Group. That was good enough to score ninth nationally in settlement dollars. The bad news is more legal trouble. As first reported by Courthouse News, Lakes Entertainment, a casino company, has sued Milberg for $54 million in Minnesota federal district court (pdf), accusing the firm of employing a damages expert who had a strong motive to inflate his damages estimate in a since-settled 1997 securities fraud action against Lakes' predecessor. Lakes, represented by George Eck of Dorsey & Whitney, alleges conspiracy, fraud and civil RICO against Milberg. According to the casino company's complaint, Milberg's expert, John Torkelsen of Princeton Venture Research, estimated damages to the class to be more than $165 million. Lakes claims that Torkelson's estimate was a big factor in its eventual decision to settle the class action for $18 million in 2000. During his deposition, Lakes alleges, Torkelson said he billed Milberg by the hour and was paid about $35,000. But the casino company says that it later learned Torkelsen had actually been hired on a contingency fee basis, giving him a strong incentive to inflate his damages estimate. Lakes claims Torkelsen and his firm earned more than $145,000 for their services -- far more than the $35,000 Torkelson testified to. The company is demanding treble damages on the $18 million settlement it claims it was extorted to reach. Milberg told the Litigation Daily in an e-mail statement that it doesn't think much of Lakes' complaint.

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