The Wall Street Journal (WSJ) reports that one of biggest players in the “lucrative class-action field,” Arkansas attorney Gene Cauley, has pleaded guilty for wire fraud and criminal contempt. The charges involve using over $9 million in proceeds awarded to clients to pay for business expenses and investments.
The WSJ also reports that Cauley, once named by the National Law Journal as one of the nation’s “top young attorneys,” was a central figure in a class action field “dominated, almost exclusively by lawyers on the coasts.” His guilty plea follows that of his mentor and business associate Bill Lerach, a San Diego based attorney currently serving time after pleading guilty to various felonies last year.
While other states have taken steps to reform class action abuse, lucrative class action firms flourish in California where little is being done to reform a system that enriches some unscrupulous attorneys, leaving pennies on the dollar for purported victims. Just think about how many class action TV commercials you have seen lately! So in addition to our beautiful coasts and natural resources, California has also become an attractive designation for out of control class-action lawsuits.