3 Wall Street foes get knocked out

Fortune
March 14, 2008
By Nicholas Varchaver

In just over a month, corporate America has seen the downfall of three of its most vilified legal opponents. Bill Lerach, the former securities class action king, was sentenced to two years in prison on February 12; Eliot Spitzer, the one-time scourge of Wall Street, announced his resignation as New York's governor on March 12; and Richard Scruggs, the master of giant tobacco and asbestos cases, pleaded guilty today to one federal count of "conspiracy to corruptly influence a state circuit court judge." He faces up to five years in federal prison.

Although Spitzer's tumble was the most dramatic, it's Scruggs and Lerach whose descents loom largest for corporate general counsel these days. After all, Spitzer had graduated from his role as prosecutor (to be replaced by Andrew Cuomo, who seems to be emulating the aggressive approach of his predecessor). And, equally important, Scruggs and Lerach were brought down for transgressions directly related to how they handled one or more cases. The result is a satisfying "I told you so" in corporate boardrooms.

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