Top New York class action law firm Milberg Weiss Bershad Schulman is in the gun. Bloomberg reports that prosecutors have told two of its partners, Steve Schulman and David Bershad, that they can expect to be indicted soon on charges involving kickbacks to clients. Prosecutors have been investigating allegations that Milberg Weiss Bershad Hynes & Lerach, which was the biggest and most-feared firm representing shareholders before it split in 2004, had been illegally paid shareholders to file securities fraud suits.

Regardless of whether the prosecutors are successful or not, an indictment would seriously hurt the firm. Edward Hayes, an attorney for Schulman told the New York Sun that the case might be politically motivated.

"What makes me uncomfortable is the fact that all of the big corporations hate these guys. Sometimes their lawsuits are meritless but a lot of the time, they're not.

"It appears they're stretching to make a case where the politicians who appoint these U.S. attorneys want to lock these guys up. The case is a stretch."

But then, he would say that. Any good lawyer would.

Still, there are political issues here. The Point of Law blog points to the fact that it's timely given that New York Republicans are putting the heat on gubernatorial candidate eliot spitzer, who's taken at least $83,000 in donations from Milberg and its attorneys over the years and with state GOP chairman Stephen Minarik saying Spitzer should give back the money. Not to worry, it also lets us know the firm has been even-handed. It's also doled out cash to the GOP.