You might recall the law firm Milberg Weiss Bershad Hynes & Lerach that specialized in shareholder lawsuits and won billions of dollars for investors. You might also remember four of the firm's lawyers who were sentenced to jail time in connection with a conspiracy in which clients were secretly paid to pursue those shareholder lawsuits (and bringing the firm $251 million in legal fees from 1979 to 2005). Anyway, they're all out of prison, Lerach released on March 8. Bloomberg caught up with them to see how it went.

"It's no fun being in prison," Lerach said in an interview when asked about his time behind bars. "You are away from your family, your loved ones and your dogs."

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While in prisons in Lompoc, California, and Safford, Arizona, Lerach read books, kept a diary and stayed abreast of the financial crisis, he said. "I tried to stay current on the events by watching financial and other news. You sometimes have to push and shove to get CNBC on rather than big truck crash programs, but that was all right," said Lerach, who also spent time in a halfway house and home confinement.

Melvyn I. Weiss, 74, lives in a Boca Raton apartment honing his golf skills and reflecting on his experience behind bars. David J. Bershad, 70, says he's getting his life together ("It was a learning experience," he says of jail time), and Steven Schulman, 58, didn't want to talk.

The governor and the state house are still at an impasse over legislation that would provide tax relief for short sellers - folks who sell their homes for less than the cost of their mortgage. It's a common way of unloading a house and avoiding foreclosure. Congress passed a measure that prevents homeowners from being held liable for paying tax on their canceled debt, and California matched the federal tax laws in 2007 and 2008, but did not pass any extension for 2009. A bill is in the legislature, but the governor says he'll veto it because it includes a penalty for wealthy taxpayers who claim higher tax refunds than they know they're actually entitled to. Senate Leader Darrell Steinberg says that the provision has been part of federal tax law since 2007. With April 15 fast approaching there are countless numbers of Californians who face a much higher tax bill than they counted on. From AP:

If no bill is signed in the next month, San Diego resident Kate Dalcour said she and her husband could be on the hook for nearly $16,000 in additional state taxes. Dalcour's husband bought a condo for $300,000 in 2007. Because of a pay cut, he was forced to sell it in December for $175,000 less than what he owed on it. "It's awful and kind of scary," said Dalcour, a 29-year-old behavioral therapist."'This is money that California would not expect to get under normal circumstances, and it's not very fair."

Not very fair is a good way of putting it.

Intrade had the chances of passage up to 80 percent earlier this morning, but now it's back down to 78 percent (too rich for my blood). NYT reports new concerns among Democratic holdouts about how the legislation would affect Medicare payments in different states.

The activist investor is not taking no for an answer on this one. He's been a critic of how the company spends its money, and now that Lionsgate is making a bid on MGM, Icahn is speaking up. From a press release:

"I believe that Lions Gate's management should not further leverage up the company to purchase a film library without allowing shareholders the opportunity to decide whether increasing exposure to this segment is wise."

The Lionsgate board had already turned down his offer to buy up to 30 percent of the company, calling the move "financially inadequate and coercive." He currently holds about 19 percent. Icahn is not alone in questioning the value of MGM's library, though analyst David Bank tells the WSJ that "this is really about making noise," something Icahn is pretty good at. Seldom, however, does the noise end up with an actual purchase.

Nine days running?: The market has been on a roll for eight straight sessions, but this could be a volatile day because it's "quadruple witching hour," when contracts for stock index futures, stock index options, stock options and single stock futures all expire. Dow is down a bit in early trading.

Boost in March car sales: Perhaps another sign of a more confident consumer (at least the ones with jobs). Lots of incentives aren't hurting either. From the WSJ:

"Buyers are starting to feel better," said Jeff Schuster, J.D. Power's director of forecasting. "While the incentives helped this month, we are looking for strong sales to continue throughout the year as access to credit and leasing continue to grow." For the year, J.D. Power expects U.S. sales to reach 11.7 million vehicles. It had previously forecast 11.5 million. In contrast, annual sales exceeded 16 million before the recession.

Deadline day for MGM: Time Warner remains interested, though its second round bid is expected to be in the $1.2 billion to $1.5 billion range, well below what the studio's creditors had been looking for. The alternative to an outright sale would be a restructuring. (Bloomberg)

Disney delays Miramax sale: Today was supposed to have been the deadline for a second round of bids, but apparently there isn't much interest (save for the Weinstein Company and Tom Gores' Platinum Equity), so maybe Disney is hoping the extra time will bring out a new player. (The Wrap)

Lax oversight of Southwest: Federal watchdogs faulted FAA managers for letting the airline fly jets that hadn't undergone mandatory maintenance work. From the WSJ:

The U.S. Office of Special Counsel--which investigates whistleblower complaints by federal employees--disclosed Thursday that Southwest failed to complete certain required maintenance involving rivets around the window frames of 55 of its Boeing 737 aircraft. The special counsel faulted FAA managers for what it said was a cozy relationship that permitted the airline to violate rules while avoiding punishment.

JetBlue expands at LAX: The airline's service to NY will be bumped up from two a day to four a day. At the same time, JetBlue will pull two of its nonstops from Long Beach to the East Coast. (Press-Telegram)

Bergstein on the ropes: Creditors have filed an emergency petition to force the film financier and his partner Ron Tutor into Chapter 11. The filings accuse Bergstein of financial mismanagement. Bergstein tells the LAT that "This filing is a farce."

DWP rate hikes moving along: On a 4-0 vote, the utility approved a rate increase of 0.8 of a cent per kilowatt hour. It's the first of four increases planned over the next year that's aimed at using more renewable power. (LAT)

Teen unemployment shoots up: The state jobless rate for 16-to-19-year-olds hit 32.2 percent in January, up from 25.2 percent a year earlier. (OC Register)

Gas prices level off: An average gallon in the L.A. area is $3.072 per gallon, according to the Auto Club, essentially unchanged from last week.

Former KB Home executive Gary Ray appears to be the government's biggest chip in its case against former CEO Bruce Karatz - except that Karatz's defense attorney, John Keker, roughed him up today during five hours of cross-examination. On Wednesday, Ray implicated Karatz in a scheme to backdate stock options, but today he admitted initially lying to prosecutors. From the LAT:

The lawyer asked why Ray initially said that numerous employees in the company knew he and Karatz were backdating options, only to change his story later. "The concept that it was an open, transparent thing was a lie," Ray said. Keker asked why Ray had insisted during initial meetings with authorities there was nothing improper about the way the option dates were chosen. "I was not prepared to live up to what I had done wrong," Ray said.

Ray pleaded guilty last year and in return promised to testify against Karatz. If all this turns out to be a he said/he said case, the prosecution might be in trouble.

You might recall that a Long Beach veterinary hospital started this off, and since then a number of businesses, including a few other local ones, have come forward, accusing the review site of extortion and fraudulent business practices. The basic allegation is that Yelp's sales reps offer to hide negative reviews if the business buys an ad. "Yelp's practices are extortionate and especially harmful to small businesses, such as our clients, who are particularly vulnerable to reviews posted on the site," said attorney Jared H. Beck. Yelp has denied any wrongdoing. Among the other plaintiffs are Le Petite Retreat Day Spa in L.A., Wag My Tail in Tejunga, Celibre in Torrance, and Mermaids Cruise in SF. From the WSJ:

Legally the matter is likely to hinge on whether this behavior constitutes a form of extortion. Yelp contends they are in fact behaving legitimately, and the plaintiffs are misunderstanding how a standard Yelp "review filter" system works. (This overlaps some of the same issues being hashed out in a lawsuit brought against Variety by the maker of film Iron Cross--he bought a $400,000 promotional package in the industry paper during the Oscars runup only to have one of the publication's critics excoriate the film.)

Even in the best of circumstances, I doubt these online review sites are a reliable measurement for much of anything. They attract experiences in the extreme - usually negative ones - that may or may not be legitimate. Businesses respond by arranging for services (and friends) to post phony raves. The upshot is a mish-mash of positive and negative comments that often leave folks more confused than informed. Here's the lawsuit.

It wound up 3rd in J.D. Power's annual rundown of most dependable cars. Mercury was 5th. They both topped Toyota, Honda, Lexus and Mercedes as having greater long-term reliability. Unfortunately for these makes, changing perceptions takes time, although the Toyota fiasco may be speed up that process. The study, which measures problems experienced by original owners of three-year-old vehicles, includes 198 different symptoms across all areas of the vehicle. All told, 25 of 36 brands improved their overall quality, a circumstance that auto repair shops are noticing all too well. They're becoming a new version of the Maytag repair man - not good news for dealerships that typically rely on the service side for a big chunk of their profit margins. By the way, the Toyota recalls didn't factor into the ranking because the survey was taken between October and December of last year.