The investigation and indictment of a New York law firm that made its reputation pursuing shareholder class action lawsuits could be one explanation for a recent decline in investor suits–a good sign for D&O insurers, one insurance broker suggests.

On May 18, the U.S. Attorney for the Central District of California, Debra Wong Yang, announced a federal grand jury indictment in Los Angeles of Milberg Weiss Bershard & Schulman and two senior partners, David J. Bershad and Steven G. Schulman. The 20-count indictment charges that going back 20 years, the partners, along with other members of the law firm, engaged in a scheme to pay secret kickbacks to individuals who agreed to act as defendants in more than 150 class action and shareholder derivative action lawsuits.

Steve Shappell, managing director of the legal and claim practice for Aon Financial Services Group, a branch of Chicago-based Aon, noted that the bulk of shareholder class action litigation has been handled by Milberg Weiss in past years, speculating that this may mean less class actions going forward. In fact, he noted that within the past few years, the number of these class action lawsuits have declined.