Foundation cultivated federal securities officials

By Mark Tapscott

Almost as important as federal judges in securities class action lawsuits are federal enforcement officials at the government's chief Wall Street watchdog agency, the Securities and Exchange Commission.

The SEC issues the major regulations that govern how stock market securities are bought and sold, oversees corporate compliance, and advises federal judges on questions in significant court cases. Having a voice at the SEC is thus vital for a plaintiffs firm like Milberg Weiss.

And prominent SEC officials of the past two decades have often played key roles in programs hosted by the Institute for Law and Economic Policy, the tax-exempt foundation established and overseen by Milberg Weiss attorneys to aid plaintiffs class-action suits.

Former SEC Commissioner Harvey Goldschmid, now a professor at Columbia University law school, was intimately involved with ILEP's founding and was the main honoree at the group's 2006 annual conference at Paradise Island in the Bahamas.

Goldschmid has been a speaker or otherwise participated in every ILEP conference and was praised at the Paradise Island meeting by former SEC chairman Arthur Levitt as an "ethical guidepost...one of the most distinguished and effective commissioners ever."

Goldschmid has vigorously defended private law firms like Milberg Weiss as "partners" with the SEC and essential tools in "helping restore public trust and confidence" in the stock market.

But Goldschmid told The Examiner in a recent interview that he "asked one or two questions" about ILEP's links to Milberg Weiss after the firm was indicted on federal racketeering charges in 2006.

"I was assured that Sandy [Stein] and Laura [Stein] were not involved in any of the problems or potential problems," Goldschmid said. "I don't think Milberg Weiss was ever playing a particularly big role."

Sandra Stein was ILEP's founder and remains executive vice president. She was a long-time Milberg Weiss attorney until joining the firm established by William Lerach in 2004 after he left Milberg Weiss in a falling out with Mel Weiss. Laura Stein is also a Milberg Weiss alumnus who served ILEP as special counsel and followed Lerach in 2004.

Other present and former SEC officials who have attended at least one ILEP conference include Levitt, commissioners Roel Campos and Paul Atkins, former counsel Heather Traeger, Stephen Cutler, director of enforcement, Paul Roye, director of investment management, Lynn Turner, chief accountant, and Richard Walker, general counsel.

Also among ILEP attendees and speakers have been high-profile officials of the Federal Trade Commission, which also has a regulatory role in the nation's businesses, including former chairman Robert Pitofsky, former general counsels William Kevacic and Steven Calkins and former senior deputy director Molly Boast.

Mark Tapscott is the editorial page editor of The Washington Examiner.

Foundation cultivated federal securities officials

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