October 10, 2012
In the wake of BLB&G’s landmark $2.425 million recovery for shareholders damaged by Bank of America’s 2009 acquisition of Merrill Lynch - the largest shareholder recovery related to the subprime meltdown and credit crisis - The New York Times profiled BLB&G partner Max Berger and the firm in a feature entitled the "Investors’ Billion-Dollar Fraud Fighter." A look at some of the firm’s recent successes, the article highlighted both the firm’s work against some of the biggest and most powerful financial institutions in the world, as well as contrasting the securities class action bar’s efforts with the relative failure of government regulators to hold the financial industry accountable.
Regarded as “unquestionably one of the giants of the plaintiffs’ bar” by his peers, Mr. Berger’s remarkable and unique career includes the negotiation of six settlements over $1 billion each. Mr. Berger believes that the case against Bank of America “will now serve as Exhibit A for corporate directors tempted to withhold information from shareholders. The message isn’t complicated: Just tell the truth.”
To date, BLB&G has obtained total recoveries for investors of over $4.5 billion in litigation arising from the financial crisis, which is remarkable in light of the extreme complexities of the cases, as they did not offer “balance-sheet restatements or criminal convictions” that could be used as evidence. According to Mr. Berger, “We never viewed these cases as easy but felt we needed to be in them in a big way, so we really doubled down.”
According to the article, these high-profile settlements have ultimately caused “a shift in the public image and reputation of the securities class-action bar,” as plaintiff attorneys exact stiff penalties from offending companies, while government regulators are “criticized for not being tough enough.” In fact, the article acknowledges that private plaintiffs have consistently “settled lawsuits for amounts far greater than the government received in similar actions.”
Reflecting on the lack of government action and regulation in response to the financial crisis, Mr. Berger laments, “In all of these scandals, no matter how good a job we do of getting results and inflicting pain, the government doesn’t seem to follow suit, and nobody learns, and it’s business as usual.”
According to Mr. Berger, “I can’t predict the next scandal, but I know that fraud is a growth industry, and so is greed.”