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Herb on TheStreet
Class Actions Could School Tyco Bulls
By Herb Greenberg
Senior Columnist
09/13/2002 01:30 PM EDT
Fried-day:
Tyco talk: The next shoe to drop on Tyco (TYC:NYSE - news - commentary) won't be the results of David Boies' forensic study but the crippling effects of likely class-action lawsuits. And these won't be nuisance suits -- which means they could cost far more money, and cause far more disruption, than any analyst is figuring.
On that score, all the events of the past year have been a vindication, of sorts, for San Diego class-action attorney Bill Lerach. (No, I haven't run into him at the grocery store yet, though he does live nearby.) He's featured in a cover story in the current California Lawyer, in a story titled "I Told You So," and in several other national publications.
I actually remember him from my days in San Francisco, when he advised me that documents in class-action cases weren't marked "confidential" and unavailable for public viewing for no reason! (Point being: Much of the evidence contained the proof that, if these trials ever went to a jury, would've spilled the beans that are falling all over today.) In a recent article headlined "The Chickens Have Come Home to Roost," Lerach details events that led up to the current scandals. (And he doesn't let Arthur Levitt off the hook!) "Let's learn this," he writes. "Wall Street is dishonest, and the repeal of Glass-Steagall has exposed American investors to further risk of this kind of self-dealing dishonest conduct."
Speaking of which: Just finished reading an advance copy of Ken Morris's Man in the Middle (Bancroft Press), a Wall Street-themed murder mystery centered on that industry's self-dealing and dishonest conduct.
Given everything we now know, you can't help but walk away from this thriller, which uses San Diego as a backdrop, without wondering where fact blurs with fiction, especially when you see what Ken used to do before he took up writing: He started Morgan Stanley's International Equity Department in 1984 at the age of 31, heading that up until he was hired by Drexel, where he was senior VP in charge of international equities. When his contract expired two years later, he took the same position at Pru-Bache and later, after a brief retirement, at Nomura, he ran all equity operations in North America. He then became an independent consultant, advising the likes of Lou Simpson, who runs investments for Berkshire Hathaway's Geico.
Ken's now a full-time writer, and this is his first book. I'll also include this disclosure: He doesn't live too far from me, either, which is why the characters in the book live in San Diego. But he didn't know that when he sent me the book; he thought I lived in New York. Small world.