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American Morning
A Busy Robin Hood
Aired September 03, 2002 - 09:46 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: With corporate giants like WorldCom and Enron collapsing around us, class action lawyers are very busy these days. Last weekend a major victory for Enron shareholders and former employees. Andersen Worldwide agreed to pay $60 million in damages for its role in the collapse of the energy company. The lead attorney and man by the name of Bill Lira (ph), our legal analyst Jeffrey Toobin took a closer look at the man American CEOs apparently who come to hate.
Who is this guy?
JEFFREY TOOBIN, CNN LEGAL ANALYST: Bill Lira (ph). You know it's so funny, we talk about investigations of companies, and you know, we always focus on Congress and U.S. attorneys offices and the SEC, but if you look back over the last 10 or 15 years, the most investigations, the most lawsuits, have been filed by private lawyers. and almost exclusively, this one law firm. This guy is leading the way. This guy, Bill Lira (ph) at Millburg Weiss, this law firm that's based in New York, but he's in San Diego.
And I wrote about it this weekend in "The New Yorker," and it's unbelievable. They are the people who are really doing the investigations. There he is. He is carrying those shredded documents, using them like a big prop in Houston.
HEMMER: In your article, Jeffrey, you say and write he has had more impact than Congress has had in 10 years. How?
TOOBIN: The thing is, you know, there is pressure to disclose wrongdoing, and the SEC has really sort of fallen down on the job over the past 10 years or so. Arthur Levitt (ph), who was the commissioner under Clinton, wasn't really allowed to function, and there was corporate wrongdoing out there. And Lira (ph) (ph) kept filing lawsuit after lawsuit, and he got thrown out a lot. But sometimes he did win, and he does get points for being very prescient about a lot of these things.
HEMMER: What about the critics who say he is an ambulance chaser of a different form, going after companies. For example, I know there was some survey done or some research done that indicates that companies starting filing bad numbers, he files suites against them. Martha Stewart is a great example.
TOOBIN: His firm just filed a lawsuit against her recently. The paradox in Bill Lira (ph), the thing that is so interesting about him, is he was right often. He filed the suit against WorldCom before even knew WorldCom was corrupt. He was thrown out. I think he was probably right about it. The same thing with Tyco, but the problem is, he files a lawsuit a week. Anybody, any company whose stock goes down, he sues. And he really...
HEMMER: Stop on that.
TOOBIN: OK.
HEMMER: Unethical?
TOOBIN: I don't think it's unethical.
HEMMER: Why not?
TOOBIN: Because some of these cases have value. He does -- in 1995, Congress, when CEOs were riding very high, they passed a law over Clinton's veto, tightening the requirements for these shareholder lawsuits, and they thought Lira (ph) would go out of business, but you know, the shareholders have started to get really upset. Now, what they're learning is that Lira (ph) was right about a lot of things, and so these lawsuits are really starting to come back.
HEMMER: Two things to get to in the final minute here. Have consumers benefit from any of the work he has done on the legal side?
TOOBIN: Sometimes. I mean, that's one of the paradox. You know, one of the things Bill Lira (ph) always does is take care of himself, and the legal fees are always paid, no doubt about that.
HEMMER: And he gets paid first.
TOOBIN: And he gets paid first. But he has made a lot of money for shareholders. The big suit now he's got is Enron. He thinks he can make $3 billion for shareholders.
HEMMER: Three billion. For shareholders?
TOOBIN: For shareholders, but he gets 10 percent. So gets $270 million legal fee.
HEMMER: I am out of time here. but you also indicate in your article that this is part of the problem with the SEC right now, having a private attorney essentially do the work of the government. The beef about that is what?
TOOBIN: The reason Lira has flourished is that the SEC has really dropped the ball, and I think the public would be better off, instead of a private money-making attorney making all the money, it would be the SEC public lawyers doing it. But that ain't happening and Lira (ph) is making money.
Bill, as always.
HEMMER: Good to see you again.
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