After the large settlement comes the large fee request. The Tyco settlement, at $3 billion with an additional $225 million to be paid by PricewaterhouseCoopers (the company’s auditor), has been hailed as the largest payout ever by a single corporate defendant in a securities fraud lawsuit. The Wall Street Journal has a report on the attorneys’ fees requested by the lead counsel for the plaintiffs – $460 million, or 14.5% of the settlement. Three institutional investors who are members of the class have objected to the size of the request. WSJ Law Blog has a rundown of the numbers.
Quote of note: “In similar cases, known as mega securities settlements, fees have averaged closer to 10%. ‘This is something of an outlier in terms of the percentage of the fee request,’ says Adam Savett, a director of the Securities Class Action Services Group, a unit of RiskMetrics Group. He added, ‘Plus, the sheer size of the fee check that the judge will picture in his mind might pose a burden.'”