From: Ron Bellows - Ron.Bellows@AIG.com
Sent: Friday, August 04, 2006 2:41 PM
To: gsg@sellnext.com
Subject: fyi - hope you are well and pypyto is better - take care

NEW YORK (Reuters)-The indictment of Milberg Weiss Bershad & Schulman L.L.P., long the dominant U.S. class-action securities litigator, is having a big impact on its ability to bring fraud cases and on class-action litigation in general.

Milberg Weiss has lost many lawyers and some clients since a federal grand jury May 18 indicted the firm and two partners, David Bershad and Steven Schulman, over an alleged scheme to pay kickbacks to plaintiffs who file lawsuits.

The firm and the lawyers have pleaded innocent, and the indictment does not stop Milberg Weiss from practicing law.

Yet in 2006, the firm filed just 17 class-action lawsuits, according to a tally of its press releases on Business Wire and PRNewswire. That is down from 36 in the second half of 2005 and 55 in the first half. Milberg Weiss has announced no new lawsuits since the indictment.

"It may be a year or two before we see if this is a blip or a fundamental change," said Bruce Carton, vice president of Securities Class Action Services, a unit of proxy advisory firm Institutional Shareholder Services. "To the extent there are cases that can be brought, other firms will fill that void."

The decline mirrors a drop in federal class-action lawsuits. A Cornerstone Research study said firms filed 61 from January to June, the slowest pace in a decade. That is down from 68 in last year's second half and 111 in the first half.

Class-action lawyers are often lauded by consumer groups but demonized by targeted companies. Congress has largely failed in efforts to curb Milberg Weiss' dominance by passing litigation reforms. The firm and its allies have portrayed the indictment itself as politically motivated.

Cheryl Evans, special counsel to the U.S. Chamber Institute for Legal Reform, said: "The drop in Cornerstone's data seems to be attributed to the decline in Milberg cases. We presume the number of cases will go back up."

Marina Ein, a Milberg Weiss spokeswoman, acknowledged the firm is cutting back. "The cyclical decline in securities class action filings is being felt throughout the plaintiffs' bar," Ms. Ein said in an e-mail. "Milberg Weiss is aggressively prosecuting a number of large and important cases and is therefore being more selective in its selection of new cases. The pending indictment has also had an impact on this decision making process."

Ron