John Torkelsen, once described by Fortune as “the damages expert of choice for the entire plaintiffs side of the securities bar”, is “expected to plead guilty to reporting false information to a government agency in a D.C. federal court Oct. 21.” The charge arises from Torkelsen’s actions in handling a venture capital fund, rather than from his courtroom work. Before now, however, Torkelsen has declined to cooperate with prosecutors, and a change in that posture could give new impetus to the ongoing federal investigation of the law firm of Milberg Weiss Bershad Hynes & Lerach, for whom Torkelsen was a “notoriously effective expert witness … in dozens of securities suits throughout the 1990s,” according to sources interviewed by Law.com. (Justin Scheck, “Charge Against Expert May Spur Probe of Milberg Weiss”, The Recorder, Oct. 10).
For more on Torkelsen and the venture capital controversy, see Barbara Fox, “Unraveling the Torkelsen Case”, U.S. 1, May 7, 2003. Peter Elkind’s Sept. 4, 2000 expose for Fortune (“The King of Pain is Hurting“) reported:
Torkelsen’s calculations of shareholder losses routinely supported the hundreds of millions of dollars Lerach sought — and he was fabulous in front of a jury should a company decide to fight….Over more than 20 years, Torkelsen’s firm, Princeton Venture Research, not only had made tens of millions working for Lerach’s firm Milberg — by far its biggest client — but also had become the damages expert of choice for the entire plaintiffs side of the securities bar….
He sent thousand-dollar gift baskets as baby presents, and he invited his many friends in the plaintiffs’ bar to an annual black-tie Christmas party that was mind-boggling in its extravagance. At one, guests arriving in Torkelsen-provided stretch limos were heralded by buglers and greeted by costumed Disney characters. Entertainment was invariably provided by a big-name act: Little Richard one year, Aretha Franklin another.
For more on the Milberg probe, see Jun. 27, Jun. 28, Aug. 29, Point of Law Aug. 8, etc. On the reliability of Torkelsen’s numbers as submitted to courts, see the Delaware Chancery Court’s memorandum (PDF) in Cinerama v. Technicolor (2004), a non-Milberg case, pp. 10 et seq.