Schneiderman

NEW YORK (Legal Newsline) - Once again, New York Assistant Attorney General Alisha Smith will have to argue that outside influences do not affect her job performance.

The New York Post recently discovered that Smith, a member of Attorney General Eric Schneiderman's staff, becomes a dominatrix named Alisha Spark when she's off the clock. A source told the Post she is paid to go to events to dominate and whip people.

The revelation caused Schneiderman to suspend her indefinitely without pay. She'll have to battle for her job against a rule that requires employees to obtain prior approval before making more than $1,000 in a side job, the Post says, and against the negative attention she's brought to the office.

Her previous employer also suffered plenty of negative attention. Before she came to the AG's office, she was an attorney with the firm Milberg Weiss. In 2006, members of the class action firm were indicted for making kickbacks to clients they convinced to file lawsuits.

William Lerach and Melvyn Weiss were among those who pleaded guilty to charges. Seymour Lazar pleaded guilty to taking secret payments in exchange for serving as a plaintiff or convincing others to do so in dozens of lawsuits.

In the aftermath of the scandal, many defendants attempted to have Milberg Weiss attorneys removed as lead counsel in their class actions.

In one such case, a federal judge refused to certify a class of investors that Milberg Weiss attorneys, including Smith, sought to represent. The lead plaintiffs were suing a company called Organogenesis.

When the Milberg attorneys told U.S. District Judge Joseph Tauro in 2007 that the indictment would not present a problem, he called their reassurances "not consoling." He also said that the Milberg firm was a large, successful firm, but the indictment would inevitably have an effect on it.

"Though Milberg Weiss has a respectable record and reputation for litigating securities class actions, the court cannot ignore the fact that by virtue of the indictment, Milberg Weiss is a different firm than it once was."

He also criticized the performances of Smith and her co-workers.

"Milberg Weiss took a month to inform this court of the indictment," Tauro wrote. "In its letter, Milberg Weiss assured the court that none of the attorneys litigating this matter were indicted. But (Steven) Schulman, one of the indicted lead partners, signed the amended complaint in this case and signed the engagement letter with all four lead plaintiffs."

Schulman had retired from the firm prior to the letter.

"Milberg Weiss asserts it would be unreasonable to conclude it was trying to misrepresent anything, as Schulman's name is clearly visible on the amended complaint for all to see. This argument is unconvincing," Tauro wrote.

Tauro added that the performances of the Milberg attorneys were not "ideal."

"Although it has defeated a motion to dismiss, it has also given the court reason to question its ability to adequately present truthful factual information to the court," Tauro wrote.

Richard Madigan, one of the lead plaintiffs, filed a certificate listing nine purchases of Organogenesis stock, but the Milberg attorneys alerted the court two days before the written discovery deadline that errors may have existed on the certificate.

Madigan submitted a new certificate two months later which included transactions by his son and daughter-in-law. The original showed nine purchases of stock, while the second showed 13 purchases and 47 sales.

"Lead Counsel does not rationalize these errors other than to assert that Madigan thought he only needed to include the purchases," Tauro said. "This excuse does not explain these mistakes, as Madigan's initial disclosure did not include all of his purchases."

He added that around the same time, another judge, while decertifying a class, admonished the firm for submitting the affidavit of a lead plaintiff without reviewing the trading data. Smith was not involved in that case.

"Considering the evidence, the court is not convinced that Madigan lied or otherwise acted in a non-credible manner," Tauro wrote. "At the same time, Milberg Weiss did allow these faulty certifications to slip through, even after being reprimanded for this sort of mistake in another case where the class was ultimately decertified."

Tauro concluded that "adequate" lead counsel would not have submitted Madigan's inaccurate affidavit.

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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