Seymour Lazar, lawyer – obituary

In 1969 the US Securities and Exchange Commission accused Lazar of plotting with a “secret group” to manipulate the stock prices of Armour, a meatpacking company, and General Host, a food company seeking to acquire it. In 1975 Lazar and others agreed a settlement without admitting or denying guilt. In the meantime, however, a group of Armour shareholders had filed a class-action suit against him. The suit was dismissed but brought Lazar together with Melvyn Weiss, a founding partner of the law firm Milberg Weiss, which had been acting for the other side.

Persuaded that class actions represented a potential gold mine, Lazar and Weiss set about exploiting it. As the class action system had developed, companies which had allegedly caused harm could be sued by a few named plaintiffs, known as “class representatives”, mounting a single action on behalf of a whole “class” of people. To avoid law firms stirring up spurious claims to earn fees, however, it had been made illegal for them to pay plaintiffs.

Ignoring this little difficulty, Lazar and Milberg Weiss set out to exploit the fact that class actions are by their nature difficult and expensive for companies to defend against, so many choose to settle even if they have done nothing wrong. According to the later investigation, Milberg Weiss paid a small group of professional plaintiffs, including Lazar and other members of his family, millions of dollars to bring more than 150 class actions. The paid plaintiffs would then help “select” Milberg Weiss as lead counsel, and approve settlements that won the firm hundreds of millions in fees.

Starting in 1976 with the flotation of the clothes retailer Gap, Lazar bought small stakes in companies, claimed to have been misled by the firms’ managements, launched class actions and received 5 to 10 per cent of whatever Milberg Weiss received, the money channelled through lawyers who did unrelated work for Lazar. “I always tell people if I read the Wall Street Journal, I can come up with a class action a day,” he boasted. No one was immune. Suits were filed against giants (British Petroleum, Lockheed) and tiddlers (Concord Holdings, ZZZZ Best).

In 1995 the US Congress passed a law requiring all “class representatives” to sign sworn affidavits that they did not buy the stock just to litigate, and that they were not getting paid to be plaintiffs. But there was little oversight and Lazar and Milberg Weiss continued to operate their scam.

In 2005 a federal grand jury indicted Lazar on counts including mail fraud and money laundering. He was accused of taking $2.6 million in kickbacks over 25 years from Milberg Weiss. Two years later, as part of a plea bargain, he pleaded guilty to obstruction of justice, filing a false tax return and making a false declaration in court. Because of his age he escaped a jail sentence. Instead he was sentenced to six months’ house arrest and two years’ probation, and fined $600,000. Weiss was eventually sentenced to 30 months in prison.

 Seymour Manuel Lazar was born in Brooklyn, New York, on June 14 1927, to Orthodox Jewish parents and grew up on a ranch in the San Fernando Valley, north of Los Angeles, but ran away from home aged 15.

After training as an electrical engineer with Lockheed during the Second World War, he enrolled at the University of California, Berkeley, where he took a degree in Economics. In 1951 he took another degree, in Law, from the University of Southern California in Los Angeles. He was said to have become a showbusiness lawyer after a film producer walked into his office in Los Angeles and enquired if that was his speciality. He claimed that it was.

 After starting in private practice, he bought Café Gala off Sunset Strip, a venue much favoured by Hollywood stars. Over time, his legal practice attracted a clientele of musicians, composers and other entertainers, and by the late 1950s Lazar was driving a Rolls-Royce and living the high life. But by the early 1960s he had lost interest in his legal practice: “I felt I had gotten to the pinnacle and I wanted to make more money,” he explained.

As well as his class action suits, in the late 1970s Lazar helped to represent would-be beneficiaries of a mysterious “lost will” of the billionaire Howard Hughes, a document “discovered” in the headquarters of the Church of Latter-day Saints in Salt Lake City, in a lawsuit against the Hughes estate.

The Mormon Will, as it was known, left millions to an eclectic group of beneficiaries, including a petrol station owner who claimed he had once given a lift to a dishevelled man claiming to be Hughes on a Nevada desert highway. Lazar put up $250,000 of his own money to prove the document was genuine and stood to earn millions of dollars in fees if he had won. But a jury in Nevada pronounced the “will” a fake.

“If I lose,” he said at the time, “I’ll just go on to something else.’’

Lazar’s first marriage was dissolved. He is survived by his second wife, Alyce Lou, and by a daughter and two sons.

Seymour Lazar, born June 14 1927, died March 30 2016