Say sayonara to Silicon Valley's enemy No. 1
Securities lawyer Bill Lerach will start a new career as a jailbird. But if you thought that his sentencing to a couple of years would sate the thirst of critics, think again.
He once ranked among the most feared members of the legal profession. Now he's about to become a jailbird.
The disgraced attorney Bill Lerach on Monday was sentenced to two years in prison for his involvement in a kickback scheme involving class action lawsuits. As part of the deal, he agreed to forfeit $7.75 million in unlawful gains.
So closes the books on one of the more controversial bit players in Silicon Valley's history--at least in this incarnation. Americans love second acts, so who knows? Maybe after getting out of stir, Lerach will reinvent himself. But I'm not sure whether Lerach morphing into a latter-day Mother Teresa would be enough to erase the depth of ill will he's earned among technology titans these last two decades. If you thought that his sentencing to a couple of years in stir would sate the thirst of critics, think again.
Memories are long in these parts and folks hold grudges. During his career, Lerach squeezed more than $4 billion in damages out of companies he sued for class action violations. Technology companies featured high on his hit list. How many of his targets were guilty of real fraud? Probably fewer than he claimed. Of course, there was the famous incident where a company he sued was guilty of shipping bricks packaged as disk drives. (It was a crooked attempt to juice quarterly sales figures.) Still, I've never met a Silicon Valley executive who thought Lerach ever had the angels on his side. For the most part, they consider him a bloodsucker who wrongly inflicted damage on innocent companies.
Never at a loss for a colorful quote, T.J. Rodgers, the founder and chief executive of Cypress Semiconductor, dismissed Lerach as someone who was "somewhat below pond scum." Did that moniker fit when Lerach sued Enron or WorldCom, two of the biggest corporate fraudsters in contemporary business history?
I suppose the polemics will continue--at least until scholars have the opportunity to scour Lerach's record and offer a dispassionate, fair-minded review of his entire career. Even so, there's no getting around the fact that Lerach's career unraveled in an embarrassing way. Whatever the final verdict, his participation in a kickback scheme leaves an indelible stain his record, though not everyone believes it should matter. Here's Ralph Nader (courtesy of The Wall Street Journal) commenting on Monday's news:
"Given the corporate crimes that Mr. Lerach has brought to justice during his long career, his crimes pale by comparison," said consumer advocate Ralph Nader. "His success is partially a reflection of the repeated failure of government enforcement agencies to protect millions of defenseless investors from fraud."
That statement alone should solidify Nader's reputation as one of the most clueless "leaders" in the contemporary American political firmament.