The overwhelming majority are either knocked out or settled by shareholders’ lawyers early for a portion of the claim, removing the potential cost of losing.
Won Kim, the Canadian class-action lawyer whose offices Mr. Spencer will call home when he’s in Toronto, says that’s about to change.
“In order to get the big awards that properly compensate damaged shareholders, we’re going to have to try these cases,” Mr. Kim says. “What Mike brings to the table is that he’s tried literally the biggest securities case in the United States. He brings a wealth of experience. His results speak for themselves.”
Those results are the product of a fierce intelligence and relentless work ethic, says Matthew Gluck, a Milberg partner who worked alongside Mr. Spencer on the long Vivendi trial.
“It starts with brains,” Mr. Gluck says. “He’s very smart and a real thinker. He’s also a very hard worker. If he’s making a legal argument, he will have read every case in the brief, digested it and anticipated all the possible problems. He is a very careful lawyer.”
He’s also extremely experienced. Mr. Spencer has tried several dozen class actions, many against big names such as Bayer Group, AT&T, Intuit Inc., Pacific Life Insurance, Equitable Life Assurance Society, Ernst & Young and virtually all the tobacco companies.
In 2006, four senior partners at Milberg’s predecessor firm, Milberg Weiss LLP, were indicted on charges they had run a 30-year kickback scheme, secretly paying people to serve as lead plaintiffs. The partnership agreed to pay $75-million (U.S.) in a non-prosecution agreement, and the U.S. government recognized the misconduct did not extend to anyone else currently at the firm.
In fact, an Ontario court said in unrelated case in 2009 that the current Milberg “does not bear the mark of Cain,” and referred to the “fine reputations and excellent credentials” of Mr. Spencer and his colleague on that case.
In Canada, the on-the-ground presence of a lawyer like Mr. Spencer may prove to be a game-changer, says Robert Staley, a corporate defence litigator lawyer at Bennett Jones LLP.
“I know him by reputation; he’s one of the top plaintiff securities class-action lawyers in the United States,” Mr. Staley says. “To be blunt, there’s a perception that some Canadian plaintiff firms don’t have the heft to take cases to trial, and that influences how they settle. With somebody like Michael Spencer in the mix, it certainly adds more credibility to the threat to try cases.”
So should officers and directors of listed Canadian corporations be uneasy at the prospect of Mr. Spencer turning his gaze to Canada?
“I’m not someone who wants to blow my own horn but I hope we can bring a level of sophistication and experience in prosecuting these cases as well as resources, both financial and in terms of experience, that will support the plaintiffs’ side,” he says.
“And yes, I hope it does give pause to anyone who would be contemplating violating the law.”
With files from The Wall Street Journal
Special to The Globe and Mail
