Competing With Gusto

The Wall Street Journal has an article (subscrip. req’d) on the lead plaintiff hearing held last week in the mutual fund trading practices cases. (The 10b-5 Daily has posted about the cases frequently, most recently on speculation that the settlements could total $1 billion.)

Quote of note: “‘Nobody should expect to get rich off this case,’ said U.S. District Judge J. Frederick Motz in early April. ‘If there is any recovery, the great bulk of the recovery should go to those who were injured, not to their lawyers, particularly in light of the fact that so much of the underlying investigative work has already been done by public authorities,’ he added. ‘Any of you who have expressed an interest as being appointed as plaintiffs’ counsel are forewarned that we mean what we say. You may wish to reconsider your request for appointment in light of this observation.’ The admonishment did little good. Six dozen lawyers showed up at last week’s hearing to angle for a lead counsel spot.”

Quote of note II: “Legislation passed by Congress in 1995 and affirmed in court rulings dictate that plaintiffs with the largest financial stake in a case should get lead-plaintiff status, which usually makes their lawyers lead counsel. But it isn’t always clear which investor suffered most, especially when there are different ways of showing harm. In the mutual-fund cases, lawyers presented myriad formulas to make their clients look like the biggest losers.”

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