IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ... · 9/22/2014 · in the united states...

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

HILL v. STATE STREET CORPORATION _____________________________________ THIS DOCUMENT RELATES TO THE SECURITIES ACTION DOCKET NO. 09-cv-12146-GAO

) ) ) ) ) ) )

Master Docket No.1:09-cv-12146-GAO

MEMORANDUM OF LAW IN SUPPORT OF CO-LEAD COUNSEL’S MOTION FOR AN AWARD OF

ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES

BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP John C. Browne Lauren A. Ormsbee Jeremy P. Robinson Evan M. Berkow 1285 Avenue of the Americas New York, New York 10019

MOTLEY RICE LLC William H. Narwold James M. Hughes Rebecca M. Katz William S. Norton Christopher F. Moriarty 28 Bridgeside Blvd. Mt. Pleasant, South Carolina 29464

Counsel for Lead Plaintiffs and the Co-Lead Counsel for the Settlement Class

Dated: September 22, 2014

Case 1:09-cv-12146-GAO Document 495 Filed 09/22/14 Page 1 of 38

TABLE OF CONTENTS TABLE OF AUTHORITIES……………………………………………………………………..iii PRELIMINARY STATEMENT .....................................................................................................1

ARGUMENT ...................................................................................................................................7

I. PLAINTIFFS’ COUNSEL ARE ENTITLED TO AN AWARD OF ATTORNEYS’ FEES FROM THE COMMON FUND ......................................................7

II. THE REQUESTED ATTORNEYS’ FEES ARE REASONABLE UNDER EITHER THE PERCENTAGE-OF-THE-FUND METHOD OR THE LODESTAR METHOD .......................................................................................................8

A. The Requested Attorneys’ Fees Are Reasonable Under the Percentage-of-the-Fund Method ......................................................................................................8

B. The Requested Attorneys’ Fees Are Reasonable Under the Lodestar Method ...................................................................................................................11

III. FACTORS CONSIDERED BY COURTS IN THE FIRST CIRCUIT CONFIRM THAT THE REQUESTED FEE IS FAIR AND REASONABLE ....................................15

A. The Amount of the Recovery Supports The Requested Fee ..................................16

B. The Skill and Experience of Counsel Support The Requested Fee .......................16

C. The Complexity and Duration of the Litigation Support the Requested Fee ........17

D. The Risk of Non-Payment Was Extremely High In This Case .............................19

E. The Amount of Time Devoted to the Litigation by Plaintiffs’ Counsel Supports The Requested Fee ..................................................................................21

F. Awards in Similar Cases Support The Requested Fee...........................................22

G. Public Policy Considerations Support The Requested Fee ....................................23

H. Lead Plaintiffs Have Approved the Requested Fee ...............................................23

I. The Reaction of the Settlement Class to Date Supports the Requested Fee ..........24

IV. THE EXPENSES INCURRED ARE REASONABLE AND WERE NECESSARY TO ACHIEVE THE BENEFIT OBTAINED ............................................25

V. THE NAMED AND LEAD PLAINTIFFS SHOULD BE AWARDED THEIR REASONABLE COSTS AND EXPENSES PURSUANT TO THE PSLRA...................27


ii

CONCLUSION ..............................................................................................................................29


iii

TABLE OF AUTHORITIES

Page(s)

Cases

Ahearn v. Credit Suisse First Boston LLC, No. 03-CV-10956 (JLT), slip op. (D. Mass. June 7, 2006), ECF No. 82 ................................27

In re Am. Express Fin. Advisors Sec. Litig., No. 04 Civ. 1773 (DAB), slip op. (S.D.N.Y. July 18, 2007), ECF No. 170............................11

Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299 (1985) .............................................................................................................8, 23

Billitteri v. Sec. Am., Inc., No. 3:09-cv-1568, 2011 WL 3585983 (N.D. Tex. Aug. 4, 2011) ...........................................11

In re Bisys, Inc. Sec. Litig., No. 04 Civ. 3840 (JSR), 2007 WL 2049726 (S.D.N.Y. July 16, 2007) ..................................11

Blum v. Stenson, 465 U.S. 886 (1984) ...................................................................................................................8

Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) ...................................................................................................................7

Bricklayers & Trowel Trades Int’l Pension Fund v. Credit Suisse Sec. (USA) LLC, 752 F.3d 82 (1st Cir. 2014) ........................................................................................................5

City of Providence v. Aeropostale, Inc., No. 11 Civ. 7132 (CM), 2014 WL 1883494 (S.D.N.Y. May 9, 2014) ....................................17

Cohen v. Brown Univ., No. 99-485-B, 2001 WL 1609383 (D.N.H. Dec. 5, 2001) ......................................................13

In re Comverse Tech., Inc. Sec. Litig., No. 06-CV-1825 (NGG), 2010 WL 2653354 (E.D.N.Y. June 24, 2010) ................................13

Cornwell v. Credit Suisse Grp., No. 08-cv-03758 (VM), slip op. (S.D.N.Y. July 18, 2011), ECF No. 117 ........................11, 13

In re CVS Corp. Sec. Litig., No. 01-11464 (JLT), slip op. (D. Mass. Sept. 7, 2005), ECF No. 191 ....................................10

Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974).....................................................................................................19


iv

Diaz v. Jiten Hotel Mgmt., 741 F.3d 170 (1st Cir. 2013) ....................................................................................................15

Duhaime v. John Hancock Mut. Life Ins. Co., 989 F. Supp. 375 (D. Mass. 1997) (O’Toole, J.) .................................................................9, 16

Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005) ...................................................................................................................5

In re Evergreen Ultra Short Opportunities Fund Sec. Litig., No. 08-11064-NMG, 2012 WL 6184269 (D. Mass. Dec. 10, 2012) .............................9, 27, 28

In re Fidelity/Micron Sec. Litig., 167 F.3d 735 (1st Cir. 1999) ....................................................................................................25

In re FLAG Telecom Holdings, Ltd. Sec. Litig., No. 02-CV-3400 (CM) (PED), 2010 WL 4537550 (S.D.N.Y. Nov. 8, 2010) ...................14, 23

Fogarazzo v. Lehman Bros., No. 03 Civ. 5194 (SAS), 2011 WL 671745 (S.D.N.Y. Feb. 23, 2011) ...................................17

In re Gilat Satellite Networks, Ltd., No. CV-02-1510 (CPS)(SMG), 2007 WL 2743675 (E.D.N.Y. Sept. 18, 2007) .....................28

In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436 (S.D.N.Y. 2004) .............................................................................................17

Hensley v. Eckerhart, 461 U.S. 424 (1983) .................................................................................................................15

Hicks v. Morgan Stanley, No. 01 Civ. 10071 (RJH), 2005 WL 2757792 (S.D.N.Y. Oct. 24, 2005)..................................8

Hoff v. Popular Inc., No. 3:09-cv-01428-GCG, slip op. (D.P.R. Nov. 2, 2011), ECF No. 225 .................................9

In re Initial Pub. Offering Sec. Litig., 671 F. Supp. 2d 467 (S.D.N.Y. 2009) ......................................................................................14

Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir. 1974) ...................................................................................................15

Latorraca v. Centennial Techs. Inc., 834 F. Supp. 2d 25 (D. Mass. 2011) ....................................................................................9, 25

In re Lernout & Hauspie Sec. Litig., No. 00-CV-11589 (PBS), slip op. (D. Mass. Dec. 22, 2004), ECF No. 930 ...........................10


v

In re Lucent Techs., Inc. Sec. Litig., 327 F. Supp. 2d 426 (D.N.J. 2004) ..........................................................................................24

In re Lupron Mktg. & Sales Prac. Litig., MDL No. 1430, 2005 WL 2006833 (D. Mass. Aug. 17, 2005) ...............................9, 12, 15, 19

Maley v. Del Global Techs. Corp., 186 F. Supp. 2d 358 (S.D.N.Y. 2002) ................................................................................13, 21

In re Marsh & McLennan Cos. Sec. Litig., No. 04 Civ. 8144 (CM), 2009 WL 5178546 (S.D.N.Y. Dec. 23, 2009) ..................................28

In re Marsh ERISA Litig., 265 F.R.D. 128 (S.D.N.Y. 2010) .......................................................................................14, 21

In re MBIA, Inc. Sec. Litig., No. 08-CV-264-KMK, slip op. (S.D.N.Y. Dec. 20, 2011), ECF No. 92 .................................10

Missouri v. Jenkins, 491 U.S. 274 (1989) .................................................................................................................13

In re MoneyGram Int’l, Inc. Sec. Litig., Civ. No. 08-883, slip op. (D. Minn. June 18, 2010), ECF No. 184 .........................................11

In re Monster Worldwide, Inc. Sec. Litig., No. 07-cv-02237 (JSR), 2008 WL 9019514 (S.D.N.Y. 2008) ................................................11

New England Carpenters Health Benefits Fund v. First Databank, Inc., No. 05-11148-PBS, 2009 WL 2408560 (D. Mass. Aug. 3, 2009) .....................................12, 13

Nichols v. Smithkline Beecham Corp., No. 00-6222, 2005 WL 950616 (E.D. Pa. Apr. 22, 2005) .......................................................11

In re OCA, Inc. Sec. & Derivative Litig., No. 05-2165, 2009 WL 512081 (E.D. La. Mar. 2, 2009) ........................................................21

In re Priceline.com, Inc. Sec. Litig., No. 3:00-CV-1884 (AVC), 2007 WL 2115592 (D. Conn. 2007) ............................................11

In re Puerto Rican Cabotage Antitrust Litig., 815 F. Supp. 2d 448 (D.P.R. Sept. 13, 2011)...............................................................10, 15, 23

In re Regions Morgan Keegan Sec., Derivative & ERISA Litig., No. 2:09-2009 SMH, slip op. (W.D. Tenn. Aug. 5, 2013), ECF No. 364 ...............................10

In re Relafen Antitrust Litig., 231 F.R.D. 52 (D. Mass. Sept. 28, 2005) ...............................................................10, 12, 13, 15


vi

Rubin v. MF Global, Ltd., No. 08 Civ. 2233 (VM), slip op. (S.D.N.Y. Nov. 18, 2011), ECF No. 198 ...........................10

Schwartz v. TXU Corp., No. 3:02-CV-2243-K, 2005 WL 3148350 (N.D. Tex. Jan. 13, 2006) .....................................17

In re StockerYale, Inc. Sec. Litig., No. 1:05cv00177-SM, 2007 WL 4589772 (D.N.H. Dec. 18, 2007) ........................................10

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) .............................................................................................................8, 23

In re Thirteen Appeals Arising Out of the San Juan Dupont Plaza Hotel Fire Litig., 56 F.3d 295 (1st Cir. 1995) ...............................................................................7, 8, 9, 12

Trzeciakowski v. GSI Grp. Inc., No. 08-CV-12065-GAO, slip op. (D. Mass. Feb. 16, 2011), ECF No. 71 .......................10, 27

In re Tyco Int’l, Ltd. Multidistrict Litig., 535 F. Supp. 2d 249 (D.N.H. 2007) ................................................................................. passim

In re Veeco Instruments Inc. Sec. Litig., No. 05 MDL 01695 (CM), 2007 WL 4115808 (S.D.N.Y. Nov. 7, 2007) ...................13, 14, 24

Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005).........................................................................................................9

In re WorldCom Inc. Sec. Litig., 388 F. Supp. 2d 319 (S.D.N.Y. 2005) ......................................................................................12

In re Xcel Energy, Inc. Sec., Derivative & ERISA Litig., 364 F. Supp. 2d 980 (D. Minn. 2005) ......................................................................................11

Statutes

The Private Litigation Securities Reform Act of 1995, 15 U.S.C. §§ 77z-1, 78u-4 ............................................................................................... passim

The Securities Act of 1933, 15 U.S.C. § 77a et seq. ...............................................................................................................3

The Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq ................................................................................................................3

Other Authorities

H.R. Conf. Rep. No. 104-369 (1995), reprinted in 1995 U.S.C.C.A.N. 730 .................................24

MANUAL FOR COMPLEX LITIGATION, FOURTH (2004) ................................................................9, 12


Court-appointed Co-Lead Counsel, Bernstein Litowitz Berger & Grossmann LLP

(“BLBG”) and Motley Rice LLC (“Motley Rice”), having achieved a Settlement of $60 million

in cash for the benefit of the Settlement Class, respectfully submit this memorandum of law in

support of their motion for an award of attorneys’ fees in the amount of 17% of the Settlement

Fund, or $10,200,000 plus interest, on behalf of all Plaintiffs’ Counsel. Co-Lead Counsel also

seek (i) reimbursement of $956,547.89 in litigation expenses incurred in prosecuting the Action,

and (ii) awards in the amount of $40,436.08 pursuant to the Private Securities Litigation Reform

Act of 1995 (“PSLRA”) for costs and expenses incurred by Plaintiffs directly related to their

representation of the Settlement Class.1

PRELIMINARY STATEMENT

The $60 million proposed Settlement, if approved by the Court, represents an excellent

recovery for the Settlement Class. As discussed below, Defendants had strong defenses to Lead

Plaintiffs’ securities claims and there was considerable uncertainty throughout the case as to

whether Lead Plaintiffs would be able to obtain any recovery. See ¶¶123-141. Nonetheless,

Plaintiffs’ Counsel vigorously litigated this case for nearly four years on an entirely contingent

1 Unless otherwise noted, capitalized terms have the meanings set out in the Stipulation and Agreement of Settlement dated July 8, 2014 (ECF No. 478-1) (the “Stipulation”). Lead Plaintiffs are simultaneously submitting the Joint Declaration of John C. Browne and William H. Narwold in Support of: (A) Lead Plaintiffs’ Motion for Final Approval of Class Action Settlement and Plan of Allocation, and (B) Co-Lead Counsel’s Motion for an Award of Attorneys’ Fees and Reimbursement of Litigation Expenses (the “Joint Declaration” or “Joint Decl.”). The citation to “¶” refers to paragraphs in the Joint Declaration. The Court is respectfully referred to the Joint Declaration for a detailed description of the history of the Action; the nature of the claims asserted; the negotiations leading to the Settlement; the risks and uncertainties of continued litigation; and a description of the services that Co-Lead Counsel provided for the benefit of the Settlement Class. BLBG and Motley Rice are Co-Lead Counsel. Other counsel that did work under the direction of Co-Lead Counsel are liaison counsel Berman DeValerio, Abraham, Fruchter & Twersky, LLP, Kessler Topaz Meltzer & Check LLP, and Milberg LLP (collectively, with Co-Lead Counsel, “Plaintiffs’ Counsel”). ¶1 n.1.


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basis against some of the largest and most well-respected law firms in the country. Co-Lead

Counsel respectfully submit that, for the reasons discussed herein, Plaintiffs’ Counsel should be

awarded the requested attorneys’ fees and litigation expenses.

As set forth in detail in the accompanying Joint Declaration, Plaintiffs’ Counsel devoted

an enormous amount of time, effort and resources to pursuing this litigation and achieving the

proposed Settlement. These efforts included: (a) an extensive investigation into the claims

alleged, including the review of public filings with the U.S. Securities and Exchange

Commission (the “SEC”), interviews with numerous confidential witnesses and consultation

with experts; (b) drafting a detailed 158-page Consolidated Amended Class Action Complaint;

(c) successfully opposing Defendants’ motions to dismiss, including, researching and drafting a

90-page opposition brief and preparing for and conducting a two day oral argument; (d)

conducting extensive discovery, including issuing numerous document requests and

interrogatories; (e) obtaining and reviewing more than 25 million pages of documents produced

by Defendants; (f) taking or defending ten depositions related directly to the Securities Action;

(g) litigating approximately twenty-two separate discovery motions on various issues and

participating in nineteen Court hearings; (h) filing a motion for class certification; and (i)

engaging in extensive arms’-length settlement negotiations, which involved the exchange of

multiple submissions concerning liability and damages with Defendants. See ¶¶8, 9-118.

Plaintiffs’ Counsel undertook these significant efforts without any compensation and in

the face of substantial litigation risks in a very challenging case. As discussed in the Joint

Declaration, the claims in this securities class action are uniquely broad and complex. Lead

Plaintiffs assert liability based on two separate sets of factual allegations. First, Lead Plaintiffs

allege that State Street artificially inflated its revenues from foreign exchange (“FX”) trading


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operations during the class period by improperly overcharging its custodial clients for certain FX

services. ¶¶4 ,26. Second, Lead Plaintiffs allege that State Street invested in billions of dollars

of underperforming mortgage-back securities (“MBS”) and other assets that were held in the

Company’s investment portfolio and in off-balance entities called conduits. According to the

Complaint, State Street falsely told investors that these investment portfolio and conduit assets

were “high quality” even though they were suffering substantial losses in late 2008 as global

financial markets were in meltdown. ¶¶4, 27. The Complaint also alleges claims based on two

different statutory schemes, the Securities Exchange Act of 1934 (the “Exchange Act”) and the

Securities Act of 1933 (“Securities Act”). ¶24.

Through these claims, Lead Plaintiffs sought to recover for investors who purchased

State Street stock during a multi-year period in which State Street made numerous public

statements in conference calls, SEC filings, press releases and during investor conferences.

Indeed, Lead Plaintiffs allege that approximately 130 false and misleading statements were made

by Defendants during the class period. ¶20. The alleged misstatements and omissions involved

complicated subjects such as off-balance sheet entities (the conduits), investments in a broad

array of esoteric financial instruments such as Alt-A, subprime, HELOC and other investments,

and foreign exchange transactions for customers who traded currencies from across the globe.

¶¶5-6,14. The breadth and complexity of the claims in this case required Lead Plaintiffs to

devote considerable effort to developing the proof necessary prepare the case for dispositive

motions and trial.

The result achieved here is particularly noteworthy when viewed against the significant

risks Lead Plaintiffs and Co-Lead Counsel faced in establishing both liability and damages on

their securities claims, particularly in the face of the unique hurdles set forth in the Private


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Securities Litigation Reform Act of 1995 (“PSLRA”). On liability, Defendants vigorously

disputed virtually every element of Lead Plaintiffs’ claims, including falsity, materiality and

scienter, and there was a significant risk that at summary judgment or trial (or on subsequent

appeal) Defendants could prevail on any of their numerous defenses to liability. ¶¶123-127, 133-

137.

For example, Defendants contended that they never improperly overcharged their

custodial clients for FX services and, if they did, it was by an immaterial amount in the context

of the Company’s enormous balance sheet. ¶127. Similarly, there was a significant risk that

Lead Plaintiffs would not be able to establish falsity or scienter relating to the alleged conduit

and investment portfolio fraud. ¶¶133-137. On this point, State Street argued throughout the

case that the decline in value of its investment portfolio and conduit assets was the result of a

temporary market dislocation that occurred during the worst financial downturn since the great

depression. Defendants noted that State Street made extensive disclosures concerning the

composition, credit rating and quality of the assets in its investment portfolio and conduits

throughout the class period, and readily disclosed billions of dollars in unrealized losses to the

market as they were incurred. Indeed, State Street repeatedly and expressly warned investors

that continued downturns in the market could result in additional losses. ¶137.

Defendants further argued that State Street’s use of the term “high quality” to describe its

assets was entirely accurate given that the assets in its investment portfolio and conduits were all

highly rated (in many cases, they had Triple A ratings or were backed by the United States

Government), and had their values closely vetted by auditors, outside consultants, and by State

Street’s own experienced credit officers. ¶134. At summary judgment or trial, State Street

would have contended that very few of the thousands of specific assets in the conduits or


5

investment portfolios ever suffered an event of default, thus demonstrating that those assets

were, in fact, “high quality.” ¶136. Defendants also would have argued that there was no insider

selling and that Lead Plaintiffs could not point to a cogent and compelling motive for Defendants

to commit securities fraud. ¶137.

Even if Lead Plaintiffs had succeeded in establishing liability on their claims, Defendants

had powerful “loss causation” arguments under the federal securities laws that, if accepted, could

have substantially reduced or eliminated the class’ damages altogether. See Dura

Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005). See also Bricklayers & Trowel Trades

Int’l Pension Fund v. Credit Suisse Sec. (USA) LLC, 752 F.3d 82, 86 (1st Cir. 2014) (plaintiffs

must prove that “the stock market must have reacted to the subsequent disclosure of the

misconduct and not to a tangle of other factors”).

Indeed, Defendants had particularly strong (and truly unique) loss causation defenses on

Lead Plaintiffs’ FX claims. Lead Plaintiffs alleged that State Street’s improper FX practices

were revealed to the market on October 20, 2009, when the California Attorney General

announced a lawsuit against State Street concerning its FX practices, and that this announcement

caused the price of the Company’s stock to decline significantly over the next few days. ¶131.

Defendants, however, argued strenuously that the decline in the price of State Street common

stock was caused by a negative earnings report that was released earlier that same day. In that

regard, Defendants pointed out that virtually the entire decline in the price of State Street’s

common stock that day occurred between 8:00 a.m. (when the negative earnings announcement

was released) and 12:00 noon (when the California Attorney General’s lawsuit was announced).

¶¶131-132. Thus, according to Defendants, Lead Plaintiffs were unable to prove damages and

satisfy “loss causation” for the FX claims under the securities laws. Defendants also had loss


6

causation arguments that, if accepted, would have greatly reduced or eliminated Lead Plaintiffs’

damages with respect to the conduit/investment portfolio claims. See ¶¶138.

In light of all of these significant risks, the $60 million cash recovery is an excellent

result and demonstrates the high quality of Plaintiffs’ Counsel’s representation. As

compensation for their significant efforts and achievements on behalf of the Settlement Class,

Co-Lead Counsel request a fee award in the amount of 17% of the Settlement Fund and

reimbursement of litigation expenses in the amount of $956,547.89. As discussed below, the

requested fee is well within the range of fees awarded in comparable class action settlements,

whether considered as a percentage of the Settlement or on a lodestar/multiplier basis. Indeed,

the requested fee represents only 34% of Plaintiffs’ Counsel’s total lodestar – that is, a

“negative” multiplier of 0.34, which is well below the range of multipliers routinely awarded in

class actions with substantial contingency risks such as this one.

Lead Plaintiffs, the Public Employees’ Retirement System of Mississippi (“MPERS”)

and Union Asset Management Holding AG (“Union”), which are both sophisticated institutional

investors that have been actively involved in overseeing the litigation on behalf of the class, have

each endorsed the requested fee and expenses as fair and reasonable. See Declaration of George

W. Neville (“MPERS Decl.”), attached to the Joint Decl. as Exhibit 2, at ¶7; Declaration of Dr.

Joachim von Cornberg and Dr. Fabian Hannich (“Union Decl.”), attached to the Joint Decl. as

Exhibit 3, at ¶7.

The reaction of the Settlement Class to date also supports the request. Pursuant to the

Court’s Preliminary Approval Order (ECF No. 488), more than 293,000 copies of the Notice

have been mailed to potential Settlement Class Members and nominees, and the Summary Notice


7

was published in The Wall Street Journal and transmitted over the PR Newswire.2 The Notice

advised potential Settlement Class Members that Co-Lead Counsel would seek fees of up to 17%

of the Settlement Fund and reimbursement of litigation expenses in an amount not to exceed

$1,300,000. See Thurin Decl. Exhibit A, at ¶¶5, 64. While the deadline for Settlement Class

Members to object to the requested attorneys’ fees and expenses has not yet passed, to date, no

objections to the attorneys’ fees or expenses set forth in the Notice have been received. See Joint

Decl. ¶¶147, 170.

For all the reasons set forth below, Co-Lead Counsel respectfully request that the Court

approve its application for an award of attorneys’ fees and reimbursement of expenses.

ARGUMENT

I. PLAINTIFFS’ COUNSEL ARE ENTITLED TO AN AWARD OF ATTORNEYS’ FEES FROM THE COMMON FUND

The U.S. Supreme Court and the First Circuit have long recognized that “a litigant or a

lawyer who recovers a common fund for the benefit of persons other than himself or his client is

entitled to a reasonable attorney’s fee from the fund as a whole.” Boeing Co. v. Van Gemert, 444

U.S. 472, 478 (1980); see In re Thirteen Appeals Arising Out of the San Juan Dupont Plaza

Hotel Fire Litig., 56 F.3d 295, 305 (1st Cir. 1995); In re Tyco Int’l, Ltd. Multidistrict Litig., 535

F. Supp. 2d 249, 265 (D.N.H. 2007). Awards of reasonable attorneys’ fees from a “common

fund” provide compensation that “encourages capable plaintiffs’ attorneys to aggressively

litigate complex, risky cases like this one” and spread the costs of the litigation “proportionately

among those benefitted by the suit.” Tyco, 535 F. Supp. 2d at 265.

2 See Declaration of Stephanie A. Thurin Regarding (A) Mailing of the Notice and Proof of Claim Form; (B) Publication of the Summary Notice; and (C) Report on Requests for Exclusion Received to Date, attached as Exhibit 1 to the Joint Decl. (“Thurin Decl.”), at ¶¶8-9.


8

The Supreme Court has also emphasized that private securities actions, such as the instant

Action, are “an essential supplement to criminal prosecutions and civil enforcement actions”

brought by the SEC. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313 (2007);

accord Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 310 (1985) (private

securities actions provide “‘a most effective weapon in the enforcement’ of the securities laws

and are ‘a necessary supplement to [SEC] action.’”) (citation omitted)). Compensating

plaintiffs’ counsel for the risks they take in bringing these actions is essential, because “[s]uch

actions could not be sustained if plaintiffs’ counsel were not to receive remuneration from the

settlement fund for their efforts on behalf of the class.” Hicks v. Morgan Stanley, No. 01 Civ.

10071 (RJH), 2005 WL 2757792, at *9 (S.D.N.Y. Oct. 24, 2005). Accordingly, Plaintiffs’

Counsel are entitled to an award of attorneys’ fees from the Settlement Fund created by the

Settlement.

II. THE REQUESTED ATTORNEYS’ FEES ARE REASONABLE UNDER EITHER THE PERCENTAGE-OF-THE-FUND METHOD OR THE LODESTAR METHOD

Fees awarded to counsel from a common fund can be determined under either the

percentage-of-the-fund method or the lodestar method. See Thirteen Appeals, 56 F.3d at 307.

Under either the percentage or the lodestar method, the requested fee in this Action is fair and

reasonable.

A. The Requested Attorneys’ Fees Are Reasonable Under the Percentage-of-the-Fund Method

The Supreme Court has endorsed the percentage method, stating that “under the

‘common fund doctrine’. . . a reasonable fee is based on a percentage of the fund bestowed on

the class.” Blum v. Stenson, 465 U.S. 886, 900 n.16 (1984). The First Circuit has also approved

of the percentage method in common fund cases, noting that it is the prevailing method and that


9

it “offers significant structural advantages in common fund cases, including ease of

administration, efficiency, and a close approximation of the marketplace.” Thirteen Appeals, 56

F.3d at 308. As this Court has noted, the percentage method “appropriately aligns the interests

of the class with the interests of the class counsel[,] . . . is ‘less burdensome to administer than

the lodestar method,’ . . . ‘enhances efficiency’ and does not create a ‘disincentive for the early

settlement of cases.’” Duhaime v. John Hancock Mut. Life Ins. Co., 989 F. Supp. 375, 377 (D.

Mass. 1997) (O’Toole, J.) (quoting Thirteen Appeals, 56 F.3d at 307); see also Wal-Mart Stores,

Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 121 (2d Cir. 2005) (the percentage method “directly aligns

the interests of the class and its counsel”).

The requested fee of 17% is well within – in fact, it is below – the typical range of

percentage fees awarded in the First Circuit in comparable cases. See Latorraca v. Centennial

Techs. Inc., 834 F. Supp. 2d 25, 27 (D. Mass. 2011) (“Court in this circuit generally award

attorneys’ fees in the range of 20-30%”); In re Lupron Mktg. & Sales Prac. Litig., MDL No.

1430, 2005 WL 2006833, at *5 (D. Mass. Aug. 17, 2005) (“Courts in the First Circuit have

recognized that fee awards in common fund cases typically range from 20 to 30 percent.”);

MANUAL FOR COMPLEX LITIGATION, FOURTH, § 14.121, at 188 (2004) (“[a]ttorney fees awarded

under the percentage method are often between 25% and 30% of the fund”).

A review of attorneys’ fees awarded in class actions with comparably sized settlements in

this Circuit strongly supports the reasonableness of the 17% fee request. See In re Evergreen

Ultra Short Opportunities Fund Sec. Litig., No. 08-11064-NMG, 2012 WL 6184269, at *1 (D.

Mass. Dec. 10, 2012) (awarding 24% of $25 million settlement fund, representing a 1.3

multiplier of counsel’s lodestar); Hoff v. Popular Inc., No. 3:09-cv-01428-GCG, slip op. at 2-3

(D.P.R. Nov. 2, 2011), ECF No. 225 (awarding 27% of $37.5 million settlement fund; 3.13


10

multiplier) (attached hereto as Ex. 1); In re Puerto Rican Cabotage Antitrust Litig., 815 F. Supp.

2d 448, 465 (D.P.R. Sept. 13, 2011) (awarding 23% of $65.85 million settlement fund; 1.08

multiplier); In re Relafen Antitrust Litig., 231 F.R.D. 52, 80-82 (D. Mass. Sept. 28, 2005)

(awarding 33.3% of $75 million settlement fund; 2.02 multiplier); In re CVS Corp. Sec. Litig.,

No. 01-11464 (JLT), slip op. at 7 (D. Mass. Sept. 7, 2005), ECF No. 191 (awarding 25% of $110

million settlement fund; 3.27 multiplier) (attached hereto as Ex. 2)3; In re Lernout & Hauspie

Sec. Litig., No. 00-CV-11589 (PBS), slip op. at 9 (D. Mass. Dec. 22, 2004), ECF No. 930

(awarding 20% of $115 million settlement fund; 1.73 multiplier) (attached hereto as Exhibit 3);

see also Trzeciakowski v. GSI Grp. Inc., No. 08-CV-12065-GAO, slip op. at 3 (D. Mass. Feb. 16,

2011), ECF No. 71 (O’Toole, J.) (awarding 25% of $3.25 million settlement; 1.47 multiplier)

(attached hereto as Ex. 4); In re StockerYale, Inc. Sec. Litig., No. 1:05cv00177-SM, 2007 WL

4589772, at *6-*7 (D.N.H. Dec. 18, 2007) (awarding 33.3% of $3.4 million settlement; 2.17

multiplier).

The requested 17% fee is also well within the range of percentage fee awards that have

been granted in comparable securities class actions in other Circuits. See, e.g., In re Regions

Morgan Keegan Sec., Derivative & ERISA Litig., No. 2:09-2009 SMH, slip op. at 16-19 (W.D.

Tenn. Aug. 5, 2013), ECF No. 364 (awarding 30% of $62 million settlement; 3.1 multiplier)

(attached hereto as Exhibit 5); In re MBIA, Inc. Sec. Litig., No. 08-CV-264-KMK, slip op. at 2-3

(S.D.N.Y. Dec. 20, 2011), ECF No. 92 (awarding 22% of $68 million settlement fund; 2.9

multiplier) (attached hereto as Ex. 6); Rubin v. MF Global, Ltd., No. 08 Civ. 2233 (VM), slip op.

3 Some of the unpublished opinions cited state only the percentage fee award and do not provide the amount of the settlement or lodestar/multiplier information. In those cases, short excerpts from the fee briefs filed in those cases, stating the amount of the settlement and counsel’s lodestar have been included in the attached exhibit with the unpublished opinion.


11

at 2 (S.D.N.Y. Nov. 18, 2011), ECF No. 198 (awarding 18% of $90 million settlement fund; 2.67

multiplier) (attached hereto as Ex. 7); Billitteri v. Sec. Am., Inc., No. 3:09-cv-1568, 2011 WL

3585983, at *9 (N.D. Tex. Aug. 4, 2011) (awarding 25% of $80 million settlement fund; 1.97

multiplier); Cornwell v. Credit Suisse Grp., No. 08-cv-03758 (VM), slip op. at 2, 4 (S.D.N.Y.

July 18, 2011), ECF No. 117 (awarding 27.5% of a $70 million settlement fund; 4.7 multiplier)

(attached hereto as Ex. 8); In re MoneyGram Int’l, Inc. Sec. Litig., Civ. No. 08-883 (DSD/JJG),

slip op. at 18 (D. Minn. June 18, 2010), ECF No. 184 (awarding 23.75% of $80 million

settlement fund; 4.0 multiplier) (attached hereto as Ex. 9); In re Monster Worldwide, Inc. Sec.

Litig., No. 07-cv-02237 (JSR), 2008 WL 9019514, at *1-*2 (S.D.N.Y. 2008) (awarding 25% of

$45 million settlement fund; 1.3 multiplier); In re Priceline.com, Inc. Sec. Litig., No. 3:00-CV-

1884 (AVC), 2007 WL 2115592, at *5 (D. Conn. 2007) (awarding 30% of $80 million

settlement fund; 1.98 multiplier); In re Am. Express Fin. Advisors Sec. Litig., No. 04 Civ. 1773

(DAB), slip op. at 8-9 (S.D.N.Y. July 18, 2007), ECF No. 170 (awarding 27% of $100 million

settlement fund; 2.8 multiplier) (attached hereto as Exhibit 10); In re Bisys, Inc. Sec. Litig., No.

04 Civ. 3840 (JSR), 2007 WL 2049726, at *3 (S.D.N.Y. July 16, 2007) (awarding 30% of $65.8

million settlement fund, 2.99 multiplier); In re Xcel Energy, Inc. Sec., Derivative & ERISA Litig.,

364 F. Supp. 2d 980, 998-99 (D. Minn. 2005) (awarding 25% of $80 million settlement fund; 4.7

multiplier); Nichols v. Smithkline Beecham Corp., No. 00-6222, 2005 WL 950616, at *20-*24

(E.D. Pa. Apr. 22, 2005) (awarding 30% of $65 million settlement fund; 3.15 multiplier).

In sum, the fees commonly awarded in securities class actions involving comparable

settlements strongly demonstrate the reasonableness of the requested fee.

B. The Requested Attorneys’ Fees Are Reasonable Under the Lodestar Method

In the First Circuit, “[t]he lodestar approach (reasonable hours spent times reasonable

hourly rates, subject to a multiplier or discount for special circumstances, plus reasonable


12

disbursements) can be a check or validation of the appropriateness of the percentage of funds fee,

but is not required.” New England Carpenters Health Benefits Fund v. First Databank, Inc., No.

05-11148-PBS, 2009 WL 2408560, at *1 (D. Mass. Aug. 3, 2009) (citation omitted); accord

Thirteen Appeals, 56 F.3d at 307; Lupron, 2005 WL 2006833, at *3; Relafen, 231 F.R.D. at 81;

see also MANUAL FOR COMPLEX LITIGATION (FOURTH) § 14.122, at 193 (2004) (“the lodestar is

. . . useful as a cross-check on the percentage method by estimating the number of hours spent on

the litigation and the hourly rate, using affidavits and other information provided by the fee

applicant. The total lodestar estimate is then divided into the proposed fee calculated under the

percentage method. The resulting figure represents the lodestar multiplier to compare to

multipliers in other cases.”).

When the lodestar is used as a cross-check, “the focus is not on the ‘necessity and

reasonableness of every hour’ of the lodestar, but on the broader question of whether the fee

award appropriately reflects the degree of time and effort expended by the attorneys.” Tyco, 535

F. Supp. 2d at 270 (quoting Thirteen Appeals, 56 F.3d at 307); see also In re WorldCom Inc. Sec.

Litig., 388 F. Supp. 2d 319, 355 (S.D.N.Y. 2005) (“Where the lodestar fee is used as ‘a mere

cross-check’ to the percentage method of determining reasonable attorneys’ fees, ‘the hours

documented by counsel need not be exhaustively scrutinized by the district court.’”). In this

case, the lodestar method – whether used directly or as a “cross-check” on the percentage method

– strongly demonstrates the reasonableness of the requested fee.

Here, Plaintiffs’ Counsel spent a total of 71,559.70 hours of attorney and other

professional support time prosecuting this Action from its inception through March 12, 2014.

See ¶158. Based on the Plaintiffs’ Counsel’s current rates, their collective lodestar for this


13

period is $30,187,765.4 See id. The requested 17% fee, which amounts to $10,200,000 (before

interest), therefore represents approximately one-third of the value of the time Plaintiffs’ Counsel

devoted to the Action – a negative multiplier of 0.34 on Plaintiffs’ Counsel’s lodestar.

The requested 0.34 multiplier in this Action is unquestionably well below the range of

multipliers commonly awarded in securities class actions and other comparable litigation.

Indeed, in securities class actions and other class actions with significant contingency risks, fees

representing multiples above the lodestar are typically awarded to reflect contingency risks and

other relevant factors. See New England Carpenters Health Benefits Fund, 2009 WL 2408560,

at *2 (awarding fee representing an 8.3 multiplier); Cornwell v. Credit Suisse Grp., slip op. at 2

(awarding 4.7 multiplier in $70 million settlement); In re Comverse Tech., Inc. Sec. Litig., No.

06-CV-1825 (NGG), 2010 WL 2653354, at *5 (E.D.N.Y. June 24, 2010) (awarding 2.78

multiplier and noting that, “[w]here, as here, counsel has litigated a complex case under a

contingency fee arrangement, they are entitled to a fee in excess of the lodestar”); Tyco, 535 F.

Supp. 2d at 271 (awarding fee representing a 2.7 multiplier); Relafen, 231 F.R.D. at 82

(awarding fee representing a 2.02 multiplier); Maley v. Del Global Techs. Corp., 186 F. Supp. 2d

358, 369, 370 (S.D.N.Y. 2002) (awarding a fee representing a 4.65 multiplier, which was “well

within the range awarded by courts in this Circuit and courts throughout the country”).

4 The Supreme Court and courts in this Circuit have approved the use of current hourly rates in calculating the base lodestar figure as a means of compensating for the delay in receiving payment and the loss of the interest. See Missouri v. Jenkins, 491 U.S. 274, 284 (1989); Cohen v. Brown Univ., No. 99-485-B, 2001 WL 1609383, at *1 (D.N.H. Dec. 5, 2001); accord In re Veeco Instruments Inc. Sec. Litig., No. 05 MDL 01695 (CM), 2007 WL 4115808, at *9 (S.D.N.Y. Nov. 7, 2007) (“The use of current rates to calculate the lodestar figure has been repeatedly endorsed by courts as a means of accounting for the delay in payment inherent in class actions and for inflation.”)


14

The lodestar presented here is extremely conservative as it is based only on the work of

Plaintiffs’ Counsel through March 12, 2014 (when the agreement in principle to settle was

reached) and therefore excludes substantial additional work that Co-Lead Counsel has engaged

in for the benefit of the Settlement Class since that date, including negotiating the final

settlement papers, preparing the class notice and plan of allocation, drafting and filing papers in

support of preliminary approval and attending the preliminary approval hearing, and finalizing

the Settlement. ¶158 n.4. In addition, Co-Lead Counsel will continue to expend additional hours

following the approval of the Settlement, overseeing the Claims Administrator’s processing of

claims received and the distribution to eligible claimants, but will not seek any further fees.

Courts have recognized that where, as here, the requested attorneys’ fees are below the

amount of class counsel’s lodestar that fact provides strong support for the reasonableness of the

requested fee. See In re FLAG Telecom Holdings, Ltd. Sec. Litig., No. 02-CV-3400 (CM)

(PED), 2010 WL 4537550, at *26 (S.D.N.Y. Nov. 8, 2010) (“Lead Counsel’s request for a

percentage fee representing a significant discount from their lodestar provides additional support

for the reasonableness of the fee request.”); In re Marsh ERISA Litig., 265 F.R.D. 128, 146

(S.D.N.Y. 2010) (that counsel only sought 87.6% of their lodestar “strongly suggests that the

requested fee is reasonable”); In re Initial Pub. Offering Sec. Litig., 671 F. Supp. 2d 467, 515

(S.D.N.Y. 2009) (noting that there was “no real danger of overcompensation” given that the

requested fee represented a discount to counsel’s lodestar); Veeco, 2007 WL 4115808, at *10

(“Not only is Plaintiffs’ Counsel not receiving a premium on their lodestar to compensate them

for the contingent risk factor, their fee request amounts to a deep discount from their lodestar.

Thus, the lodestar ‘cross-check’ unquestionably supports” the fee award).


15

In sum, whether calculated as a percentage of the fund or under the lodestar method, the

requested fee is well within the range of fees routinely awarded by courts in securities class

actions.

III. FACTORS CONSIDERED BY COURTS IN THE FIRST CIRCUIT CONFIRM THAT THE REQUESTED FEE IS FAIR AND REASONABLE

Although the First Circuit has not set forth a comprehensive list of factors to be

considered when evaluating an attorneys’ fees request pursuant to the percentage-of-the-fund

approach, other District Courts within this Circuit have assessed the reasonableness of proposed

fees by considering the following factors, which track those used by the Second and Third

Circuits in evaluating percentage fee awards:

(1) the size of the fund and the number of persons benefitted; (2) the skill, experience, and efficiency of the attorneys involved; (3) the complexity and duration of the litigation; (4) the risks of the litigation; (5) the amount of time devoted to the case by counsel; (6) awards in similar cases; and (7) public policy considerations, if any.

See Puerto Rican Cabotage, 815 F. Supp. 2d at 458; Lupron, 2005 WL 2006833, at *3; Relafen,

231 F.R.D. at 79; see also Tyco, 535 F. Supp. 2d at 266.5 Consideration of all of these factors

provides further confirmation that the fee requested here is reasonable.

5 When a fee is awarded on a lodestar basis, courts consider the 12 factors set forth in Johnson v. Georgia Highway Express, 488 F.2d 714, 717-19 (5th Cir. 1974) and Hensley v. Eckerhart, 461 U.S. 424, 430 n.3 (1983). See Diaz v. Jiten Hotel Mgmt., 741 F.3d 170, 177 n.7 (1st Cir. 2013). These factors, which substantially overlap with the factors listed above, are: “(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the ‘undesirability’ of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.” See Diaz, 741 F.3d at 177 n.7.


16

A. The Amount of the Recovery Supports The Requested Fee

Here, Co-Lead Counsel have achieved a substantial recovery of $60 million for the

benefit of the Settlement Class. The Settlement is all cash and numerous members of the

Settlement Class will now receive compensation that was otherwise uncertain when the case

began. The Settlement achieved by Co-Lead Counsel represents an excellent recovery for

members of the Settlement Class, particularly in light of the substantial risks posed in the Action.

¶¶3, 10, 161. Co-Lead Counsel submit that the size and quality of the recovery obtained is a

testament to the quality of Co-Lead Counsel’s representation and supports the reasonableness of

the requested fee. Indeed, one of the “distinct advantages” of the percentage-of-the-fund method

is that it directly incorporates the value of the recovery obtained into the calculation of the fee.

See Duhaime, 989 F. Supp. at 377 (an advantage of the percentage method is that it “focuses on

result, rather than process, which better approximates the workings of the marketplace” and

provides that “the greater the value secured for the class, the greater the fee earned by class

counsel”) (internal quotation marks omitted).

B. The Skill and Experience of Counsel Support The Requested Fee

Considerable litigation skills were required in order for Co-Lead Counsel to achieve the

Settlement in this Action. This was a complex case involving a number of distinct factual and

legal issues. Given the many contested issues, it took highly skilled counsel to represent the

class and bring about the substantial recovery that has been obtained. See ¶¶123-141, 162.

As demonstrated by their firm resumes (attached as Exhibits 5A-3 and 5B-3 to the Joint

Declaration), BLBG and Motley Rice are among the nation’s leading securities class action

firms. Co-Lead Counsel submit that the skill of their attorneys, the quality of their efforts in the

litigation, their substantial experience in securities class actions, and their commitment to the

litigation were key elements in enabling Co-Lead Counsel to negotiate this Settlement.


17

Courts have also recognized that the quality of the opposition faced by plaintiffs’ counsel

should also be taken into consideration in assessing the quality of counsel’s performance. Here,

the State Street Defendants were represented by Wilmer Cutler Pickering Hale and Dorr, LLP,

the Underwriter Defendants were represented by Goodwin Procter LLP, and Defendant Ernst &

Young was represented by Skadden, Arps, Slate, Meagher & Flom LLP, all of which are among

the country’s most prestigious and experienced defense firms. These firms vigorously and ably

defended the Action for more than four years. See ¶163. Notwithstanding this formidable

opposition, Co-Lead Counsel’s thorough investigation, persistent efforts through the discovery

process, and their resulting ability to present a strong case enabled them to achieve a favorable

settlement. Thus, this factor supports the reasonableness of the requested fee. See, e.g.,

Schwartz v. TXU Corp., No. 3:02-CV-2243-K, 2005 WL 3148350, at *30 (N.D. Tex. Jan. 13,

2006) (“The ability of plaintiffs’ counsel to obtain such a favorable settlement for the Class in

the face of such formidable legal opposition confirms the superior quality of their

representation”); In re Global Crossing Sec. & ERISA Litig., 225 F.R.D. 436, 467 (S.D.N.Y.

2004) (“[t]he quality of opposing counsel is also important in evaluating the quality of plaintiffs’

counsels’ work”).

C. The Complexity and Duration of the Litigation Support the Requested Fee

There can be no dispute that this litigation was extremely complex and vigorously

litigated by both Plaintiffs and Defendants. Even in more straightforward cases, Courts have

long recognized that securities class actions are generally complex and difficult. See City of

Providence v. Aeropostale, Inc., No. 11 Civ. 7132 (CM) (GWG), 2014 WL 1883494, at *16

(S.D.N.Y. May 9, 2014) (“the complex and multifaceted subject matter involved in a securities

class action such as this supports the fee request”); Fogarazzo v. Lehman Bros., No. 03 Civ.

5194 (SAS), 2011 WL 671745, at *3 (S.D.N.Y. Feb. 23, 2011) (“courts have recognized that, in


18

general, securities actions are highly complex”). In fact, this case was substantially more

complex and multi-faceted than a typical securities action.

As described in greater detail in the Joint Declaration, the claims asserted in the

Securities Action were broad and complex: Lead Plaintiffs sought to recover for investors who

purchased State Street stock during a multi-year period in which State Street made numerous

public statements in conference calls, SEC filings, press releases and during investor

conferences. Indeed, Lead Plaintiffs allege that approximately 130 false and misleading

statements were allegedly made by Defendants during the class period, relating to both the

alleged FX fraud and the alleged conduit/investment portfolio fraud. ¶5. The alleged

misstatements and omissions involved complicated subjects such as off-balance sheet entities

(the conduits) and foreign exchange transactions for customers who traded currencies from

across the globe. And Co-Lead Counsel faced heightened pleading and proof challenges under

the PSLRA and relevant “loss causation” jurisprudence. Thus, this Action involved a number of

factually complex and hotly disputed issues concerning State Street’s FX trading practices and

its related contracts with its custodian clients, as well as complicated issues related to the

valuation of assets, including mortgage-backed securities, which were included in the conduits

and State Street’s investment portfolio. ¶¶4-7, 25-27.

Co-Lead Counsel had to demonstrate substantial expertise in order to marshal evidence

on these matters through their investigation and extensive factual discovery. Moreover, the

discovery process in this Action was hotly disputed and resulted in multiple discovery motions

relating to complex factual and legal issues such as Luxembourg secrecy laws and electronic

search parameters. ¶¶43-109. Co-Lead Counsel successfully confronted these myriad


19

difficulties and were able to achieve a very favorable recovery for the Settlement Class. Thus,

this factor fully supports the fee requested.

D. The Risk of Non-Payment Was Extremely High In This Case

The fully contingent nature of Co-Lead Counsel’s fee and the substantial risks posed by

the litigation are also very important factors supporting the requested fee. “Many cases recognize

that the risk [of non-payment] assumed by an attorney is perhaps the foremost factor in

determining an appropriate fee award.” Lupron, 2005 WL 2006833, at *4 (internal quotation

marks omitted). “No one expects a lawyer whose compensation is contingent upon his success

to charge, when successful, as little as he would charge a client who in advance had agreed to

pay for his services, regardless of success.” Detroit v. Grinnell Corp., 495 F.2d 448, 470 (2d

Cir. 1974).

As noted above and in the Joint Declaration (¶¶123-141), from the outset of this case, it

was apparent that Co-Lead Counsel faced very significant challenges to establishing liability and

damages in this Action, and there was a significant risk that the case could be litigated for many

years but result in no recovery for the class and no payment for Plaintiffs’ Counsel. Nonetheless,

Co-Lead Counsel devoted an enormous amount of resources to the vigorous and effective

prosecution of the case and made every effort to obtain the recovery achieved here for the benefit

of the class.

The very significant litigation risks present in this case are set forth in more detail above

and in the Joint Declaration, but summarized briefly: Defendants disputed both falsity and

scienter on all of Lead Plaintiffs’ claims, and there was a significant risk that at summary

judgment or trial (or on appeal), Defendants would prevail on either liability or damages. For

example, Defendants contended that they never improperly overcharged their custodial clients

for FX services and, if they did, it was by an immaterial amount. Similarly, Defendants claimed


20

that their statements regarding the assets in the Company’s conduits and investment portfolio as

being “high quality,” were non-actionable statements of opinion and, in any event, were

completely true given that these assets were rated “AA” or higher and suffered an immaterial

number of defaults. Defendants noted that they made extensive disclosures about the assets in

State Street’s investment portfolio and conduits, including making detailed investor presentations

that broke the assets down by asset class, maturity date, and credit rating while expressly

warning investors that deteriorating market conditions could cause these assets to suffer declines

in value. State Street also disclosed billions of dollars in unrealized losses as the markets

declined, which State Street would point to as evidence that it never sought to deceive its

investors but honestly held the belief that the assets would rebound in value when the financial

markets stabilized.

Defendants would have also argued at summary judgment or at trial that State Street was

actually correct that these assets were “high quality” because the Company received all

contracted-for interest and principal payments as to all but an immaterial amount of the

approximately ten thousand assets in the investment portfolio and conduits.

Even if Lead Plaintiffs had succeeded in establishing liability, Defendants had

particularly powerful “loss causation” arguments that posed a significant risk that Lead

Plaintiffs’ damages could be substantially reduced or eliminated altogether. In particular,

Defendants had a very powerful (and unique) “loss causation” argument relating to Lead

Plaintiffs’ FX claims, as well as cogent and compelling “loss causation” challenges to the

investment portfolio and conduit claims. Each of these arguments posed a significant risk to

Lead Plaintiffs’ ability to recover in this action.


21

In the face of these uncertainties regarding the outcome of the case, Co-Lead Counsel

prosecuted this Action on a wholly contingent basis, knowing that the litigation could last for

years and would require the devotion of a substantial amount of attorney time and a significant

advance of litigation expenses with no guarantee of any compensation. Co-Lead Counsel’s

assumption of this contingency fee risk, and its extensive litigation of the Action in the face of

these risks, strongly supports the reasonableness of the requested fee. See Marsh ERISA Litig.,

265 F.R.D. at 148 (“[t]here was significant risk of non-payment in this case, and Plaintiffs’

Counsel should be rewarded for having borne and successfully overcome that risk.”); In re OCA,

Inc. Sec. & Derivative Litig., No. 05-2165, 2009 WL 512081, at *22 (E.D. La. Mar. 2, 2009)

(where counsel faced challenges in establishing scienter and loss causation and in proving

liability and damages at trial, “the risk plaintiffs’ counsel undertook in litigating this case on a

contingency basis must be considered in its award of attorneys’ fees, and thus an upward

adjustment is warranted”); Maley, 186 F. Supp. 2d at 372 (“Class counsel undertook a substantial

risk of absolute non-payment in prosecuting this action, for which they should be adequately

compensated”).

Indeed, given litigation risks such as these, courts typically award a substantial positive

multiplier on counsel’s lodestar to compensate for the possibility that there may have been no

recovery at all. Here, however, the requested fee represents substantially less than Plaintiffs’

Counsel’s lodestar. Accordingly, this factor strongly supports the reasonableness of the

requested fee.

E. The Amount of Time Devoted to the Litigation by Plaintiffs’ Counsel Supports The Requested Fee

The extensive time and effort expended by Plaintiffs’ Counsel in prosecuting this Action

and achieving the Settlement also establish that the requested fee is justified and reasonable. The


22

Joint Declaration details the substantial efforts of Co-Lead Counsel and the other Plaintiffs’

Counsel in prosecuting Lead Plaintiffs’ claims over the course of nearly four years of litigation.

As set forth in greater detail in the Joint Declaration, Co-Lead Counsel, among other things:

conducted a detailed factual investigation into State Street’s FX practices and the assets included in the conduits and State Street’s investment portfolio, including a thorough review of publicly available information such as SEC filings, conference call transcripts, analyst reports, and news articles, as well as interviews with numerous confidential witnesses and consultation with experts in the foreign exchange and MBS fields (¶¶19-22);

drafted a detailed consolidated complaint and consolidated amended complaint based on this investigation (¶¶23-27);

successfully opposed Defendants’ motions to dismiss (¶¶28-34);

engaged in extensive and vigorously contested factual discovery, which included obtaining and reviewing more than 25 million pages of documents from Defendants and taking or defending ten depositions (¶¶43-60, 110-113);

briefed more than 22 discovery motions (¶¶8, 61-109);

participated in approximately 19 hearings before the Court concerning discovery and other matters (¶8);

prepared and filed a motion for class certification that was pending before the Court when the agreement in principle to settle was reached (¶¶114-115); and

engaged in extensive arms’-length settlement negotiations, which involved the exchange of multiple submissions concerning liability and damages with Defendants (¶¶116-118).

As noted above, Plaintiffs’ Counsel expended a total of more than 71,500 hours

investigating, prosecuting and resolving this Action through March 12, 2014 with a total lodestar

value of over $30 million. ¶158. The substantial time and effort devoted to this case and Co-

Lead Counsel’s efficient and effective management of the litigation, was critical in obtaining the

favorable result achieved by the Settlement, and confirms that the fee request here is reasonable.

F. Awards in Similar Cases Support The Requested Fee

As discussed above in Section II.A, Co-Lead Counsel’s requested fee of 17% of the

Settlement Fund is well within the range of fee awards in class action cases in this Circuit and

across the country. See Section II.A, supra. Moreover, the reasonable percentage fee award


23

represents a multiplier of only 0.34, which is well below the norm awarded in class action cases

with substantial contingency risks. See Section II.B, supra. Thus, this factor strongly supports

the reasonableness of the requested fee.

G. Public Policy Considerations Support The Requested Fee

A strong public policy concern exists for rewarding firms for bringing successful

securities litigation. The Supreme Court has emphasized that private securities actions such as

this provide “‘a most effective weapon in the enforcement’ of the securities laws and are ‘a

necessary supplement to [SEC] action.’” Bateman, 472 U.S. at 310 (citation omitted); see also

Tellabs, 551 U.S. at 313. Accordingly, public policy favors granting Co-Lead Counsel’s fee and

expense application here. See Puerto Rican Cabotage, 815 F. Supp. 2d at 463; Tyco, 535 F.

Supp. 2d at 270; FLAG Telecom, 2010 WL 4537550, at *29 (if the “important public policy [of

enforcing the securities laws] is to be carried out, the courts should award fees which will

adequately compensate Lead Counsel for the value of their efforts, taking into account the

enormous risks they undertook”).

H. Lead Plaintiffs Have Approved the Requested Fee

The Court-appointed Lead Plaintiffs – MPERS and Union – are both sophisticated

institutional investors who were appointed pursuant to the PSLRA. As set forth in the Lead

Plaintiffs’ respective declarations, the Lead Plaintiffs oversaw the prosecution and resolution of

this Action, and had a sound basis for assessing the reasonableness of the fee request. See

MPERS Decl. ¶¶3-5; Union Decl. ¶¶3-5. Each of the Lead Plaintiffs fully supports and

approves the fee request. See MPERS Decl. ¶7; Union Decl. ¶7.

The PSLRA was intended to encourage institutional investors like Lead Plaintiffs to

assume control of securities class actions in order to “increase the likelihood that parties with

significant holdings in issuers, whose interests are more strongly aligned with the class of


24

shareholders, will participate in the litigation and exercise control over the selection and actions

of plaintiff’s counsel.” H.R. Conf. Rep. No. 104-369, at *27 (1995), reprinted in 1995

U.S.C.C.A.N. 730, 731. Congress believed that these institutions would be in the best position to

monitor the prosecution and to assess the reasonableness of counsel’s fee requests. Accordingly,

Lead Plaintiffs’ endorsement of the fee request in this PSLRA action supports its approval as fair

and reasonable. See, e.g., Veeco, 2007 WL 4115808, at *8 (“public policy considerations

support the award in this case because the Lead Plaintiff . . . – a large public pension fund –

conscientiously supervised the work of lead counsel and has approved the fee request”); In re

Lucent Techs., Inc. Sec. Litig., 327 F. Supp. 2d 426, 442 (D.N.J. 2004) (“[s]ignificantly, the Lead

Plaintiffs, both of whom are institutional investors with great financial stakes in the outcome of

the litigation, have reviewed and approved Lead Counsel’s fees and expenses request”).

I. The Reaction of the Settlement Class to Date Supports the Requested Fee

The reaction of the Settlement Class to date also supports the requested fee. As of

September 22, 2014, the Claims Administrator has disseminated the Notice to more than 293,000

potential Settlement Class Members and nominees informing them of, among other things, Co-

Lead Counsel’s intention to apply to the Court for an award of attorneys’ fees in an amount not

to exceed 17% of the Settlement Fund and reimbursement of up to $1,300,000 in expenses

¶¶170, 184. While the time to object to the fee and expense application does not expire until

October 6, 2014, to date, no objections to the amount of attorneys’ fees and expenses set forth in

the Notice have been received. ¶¶170, 184. Co-Lead Counsel will address any objections

received in their reply papers to be filed with the Court on October 20, 2014.


25

IV. THE EXPENSES INCURRED ARE REASONABLE AND WERE NECESSARY TO ACHIEVE THE BENEFIT OBTAINED

Plaintiffs’ Counsel’s fee application includes a request for reimbursement of litigation

expenses that were reasonably incurred and necessary to the prosecution of this Action. See

¶¶172-180. These expenses are properly recoverable. See In re Fidelity/Micron Sec. Litig., 167

F.3d 735, 737 (1st Cir. 1999) (“lawyers whose efforts succeed in creating a common fund for the

benefit of a class are entitled not only to reasonable fees, but also to recover from the fund . . .

expenses, reasonable in amount, that were necessary to bring the action to a climax”); Latorraca,

834 F. Supp. 2d at 28 (“In addition to attorneys’ fees, lawyers who recover a common fund for a

class are entitled to reimbursement of out-of-pocket expenses incurred during the litigation.”).

As set forth in detail in the Joint Declaration, Plaintiffs’ Counsel incurred $956,547.89 in

litigation expenses on behalf of the Settlement Class in the prosecution of the Action. ¶174.

Reimbursement of these expenses is fair and reasonable.

One of the largest component of expenses related to experts. Specifically, $204,711.79,

or 21% of the total expenses, was expended on experts and consultants. ¶175. Co-Lead Counsel

retained a damages expert to assist in the prosecution and resolution of the Action who assisted

Co-Lead Counsel during the preparation of the Complaint, during the settlement negotiations

with the Defendants, and with the development of the proposed Plan of Allocation. Id. Co-Lead

Counsel also consulted with experts on FX markets, MBS investments and accounting. Id.

Another large component of the expenses, $378,818.93, or 40% of the total expenses,

was for the necessary costs and services relating to the vast amount of documents produced in

this Action, including for both the creation and maintenance of an electronic database that

enabled Plaintiffs’ Counsel to efficiently and effectively search and review the more than 25


26

million pages of documents produced to Lead Plaintiffs and the costs associated with the review

and production of Plaintiffs’ electronic documents. ¶176.

Another substantial litigation expense was online legal and factual research. The on-line

research conducted by Plaintiffs’ Counsel was necessary to their factual investigation of the

claims, the preparation of the Complaint, responding to Defendants’ motions to dismiss, and to

litigate the various contested discovery motions, including numerous motions to compel. The

charges for on-line legal and factual research together amounted to $146,795.18. ¶177. These

are the amounts that were charged to Plaintiffs’ Counsel by their vendors; Plaintiffs’ Counsel do

not impose any surcharge or otherwise make any profit from these services.

The other expenses for which Plaintiffs’ Counsel seek reimbursement are the types of

expenses that are necessarily incurred in litigation and routinely charged to clients billed by the

hour. These expenses include, among others, court fees, court reporters, out-of-town travel, and

copying costs. ¶178. The foregoing expense items are billed separately by Plaintiffs’ Counsel,

and such charges are not duplicated in the firms’ hourly billing rates. ¶174.

The Notice informed potential Settlement Class Members that Co-Lead Counsel would

apply for reimbursement of litigation expenses for all Plaintiffs’ Counsel as well as for the costs

incurred by Plaintiffs in an amount not to exceed $1,300,000. The total amount of expenses

requested, $996,983.97 (which includes $956,547.89 in Plaintiffs’ Counsel’s expenses and the

$40,436.08 in PSLRA awards to reimburse Plaintiffs’ costs and expenses), is significantly below

the amount listed in the Notice and, to date, there has been no objection to the request for

expenses. ¶184.


27

V. THE NAMED AND LEAD PLAINTIFFS SHOULD BE AWARDED THEIR REASONABLE COSTS AND EXPENSES PURSUANT TO THE PSLRA

In connection with the Co-Lead Counsel’s request for reimbursement of litigation

expenses, Plaintiffs seek a total of $40,436.08 in PSLRA awards to reimburse costs and expenses

incurred by them directly relating to their representation of the Settlement Class. See Joint Decl.

¶¶181-183 and Exs. 2 to 4. The PSLRA specifically provides that an “award of reasonable costs

and expenses (including lost wages) directly relating to the representation of the class” may be

made to “any representative party serving on behalf of a class.” 15 U.S.C. §§ 77z-1(a)(4), 78u-

4(a)(4). See Evergreen Ultra, 2012 WL 6184269, at *2 (reimbursing institutional lead plaintiffs

a total of $54,626 for the time that their employees spent assisting in prosecution of the action,

where lead plaintiffs had “worked closely with counsel throughout the case, communicated with

counsel on a regular basis, reviewed and provided input with respect to counsel’s submissions,

provided information, produced documents, and participated in settlement discussions”); see also

Ahearn v. Credit Suisse First Boston LLC, No. 03-CV-10956 (JLT), slip op. at 5-6 (D. Mass.

June 7, 2006), ECF No. 82 (awarding a total of $35,000 in PSLRA expenses to two lead

plaintiffs) (attached hereto as Ex. 11); Trzeciakowski v. GSI Grp. Inc., No. 08-CV-12065-GAO,

slip op. at 3 (D. Mass. Feb. 16, 2011) (O’Toole, J.) (awarding $10,000 PSLRA award to lead

plaintiff) (attached hereto as Ex. 4).

As set forth in the declarations of Lead Plaintiffs MPERS and Union and Plaintiff Miami

Beach Employees Retirement Plan (“Miami Beach”), these Plaintiffs have actively and

effectively fulfilled their obligations as representatives of the Settlement Class, complying with

the many demands placed upon them, and providing valuable assistance to Co-Lead Counsel.

These Plaintiffs, among other things: (i) participated in discussions with Co-Lead Counsel

concerning significant developments in the litigation; (ii) reviewed significant pleadings and


28

briefs; (iii) participated in the production of discovery, including gathering and reviewing

documents in response to discovery requests; (iv) prepared and sat for depositions in furtherance

of the motion for class certification; and (v) oversaw settlement negotiations on behalf of the

Settlement Class. See Joint Decl. Exs. 2 to 4, and ¶183.

The foregoing efforts are precisely the types of activities Courts have found to support

reimbursement to class representatives based on the value of the time expended by their

employees. See, e.g., Evergreen Ultra, 2012 WL 6184269, at *2; In re Marsh & McLennan Cos.

Sec. Litig., No. 04 Civ. 8144 (CM), 2009 WL 5178546, at *21 (S.D.N.Y. Dec. 23, 2009)

(awarding over $200,000 to lead plaintiffs to compensate them “for their reasonable costs and

expenses incurred in managing this litigation and representing the Class” and noting that these

efforts were “precisely the types of activities that support awarding reimbursement of expenses

to class representatives”). The time spent by employees of Plaintiffs in supervising and

participating in the prosecution of the Action was time that these employees could not engage in

their normal duties for Plaintiffs and, thus, represented a cost to these institutions. ¶183; In re

Gilat Satellite Networks, Ltd., No. CV-02-1510 (CPS)(SMG), 2007 WL 2743675, at *19

(E.D.N.Y. Sept. 18, 2007) (granting PSLRA awards where, as here, “the tasks undertaken by

employees of Lead Plaintiffs reduced the amount of time those employees would have spent on

other work and these tasks and rates appear reasonable to the furtherance of the litigation”).

The Notice to Settlement Class Members specifically stated that the Litigation Expenses

requested by Co-Lead Counsel might “include an application for reimbursement of the

reasonable costs and expenses incurred by Plaintiffs directly related to their representation of the

Settlement Class.” Notice ¶¶5, 64. To date, there have been no objections to this request. Co-

Lead Counsel respectfully request that the Court award $21,288.75 to MPERS; $15,394.00 to


29

Union; and $3,753.33 to Miami Beach as compensation for their reasonable costs and expenses

incurred in representing the Settlement Class.

CONCLUSION

For the foregoing reasons, Co-Lead Counsel respectfully request that the Court award (i)

attorneys’ fees in the amount of 17% of the Settlement Fund, or $10,200,000 plus interest

accrued at the same rate as earned by the Settlement Fund; (ii) reimbursement of $956,547.89 in

litigation expenses; and (iii) $40,436.08 in reimbursement of Plaintiffs’ costs and expenses.

Dated: September 22, 2014 Respectfully submitted,

BERMAN DEVALERIO Bryan A. Wood (BBO#648414) One Liberty Square Boston, Massachusetts 02109 Telephone: (617) 542-8300 Facsimile: (617) 542-1194 Email: [email protected] Liaison Counsel for Plaintiffs

/s/ John C. Browne BERNSTEIN LITOWITZ BERGER &

GROSSMANN LLP John C. Browne (Admitted Pro Hac Vice) Jeremy P. Robinson (Admitted Pro Hac Vice) Lauren A. Ormsbee (Admitted Pro Hac Vice) Evan M. Berkow (Admitted Pro Hac Vice) 1285 Avenue of the Americas, 38th Floor New York, New York 10019 Telephone: (212) 554-1400 Facsimile: (212) 501-0300 [email protected] [email protected] [email protected] [email protected] Co-Lead Counsel for Lead Plaintiffs and the Settlement Class in the Securities Action -and- MOTLEY RICE LLC William H. Narwold (Admitted Pro Hac Vice) James M. Hughes (Admitted Pro Hac Vice) Rebecca M. Katz (Admitted Pro Hac Vice) William S. Norton (Admitted Pro Hac Vice) Christopher F. Moriarty (Admitted Pro Hac Vice) 28 Bridgeside Boulevard Mt. Pleasant, South Carolina 29464 Telephone: (843) 216-9000


30

Facsimile: (843) 216-9450 [email protected] [email protected] [email protected] [email protected] [email protected] Co-Lead Counsel for Lead Plaintiffs and the Settlement Class in the Securities Action

#826580


31

CERTIFICATE OF SERVICE

I hereby certify that the above Memorandum of Law in Support of Co-Lead Counsel’s

Motion for an Award of Attorneys’ Fees and Reimbursement of Litigation Expenses was filed

through the ECF system and will be sent electronically to the registered participants as identified

on the Notice of Electronic Filing on September 22, 2014.

/s/ John C. Browne John C. Browne


Exhibit 1

Case 1:09-cv-12146-GAO Document 495-1 Filed 09/22/14 Page 1 of 5

Case 3:09-cv-01428-GAG-BJM Document 225 Filed 11/02/11 Page 1 of 4Case 1:09-cv-12146-GAO Document 495-1 Filed 09/22/14 Page 2 of 5




Exhibit 2


UNITED STATES DISTRICT COURTDISTRICT OF MASSACHUSETTS

IN RE CVS CORPORATION SECURITIES : C.A . No. 01-11464 (JLT)LITIGATION

x

ORDER AND FINAL JUDGMENT

This matter came before the Court for hearing pursuant to an Order dated

June 8, 2005 (the "Preliminary Approval Order"), on the application of the parties fo r

approval of the settlement provided for in the Stipulation and Agreement of Compromise ,

Settlement and Release of Securities Action dated June 6, 2005 (the "Securities

Stipulation") ; and

Due and adequate notice having been given to members of the Class (as

defined below), as required in the Preliminary Approval Order, and following suc h

notice , a hearing having been held before this Court on September 7, 2005 (the

"Settlement Hearing") to determine the matters contemplated herein ; and

The Court having considered all papers and filings had herein and

otherwise being fully informed of the premises and good cause appearing therefore ; and

All capitalized terms herein having the same meanings defined in the

Securities Stipulation .

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AN D

DECREED THAT :

The Court has jurisdiction over the subject matter of the Securitie s

Action, Lead Plaintiff, all members of the Class and the Defendants .


2 . For the reasons set forth in the Court's Order dated October 16,

2003, the Court finds that the prerequisites for a class action under Federal Rules of Civi l

Procedure 23 (a) and (b)(3) have been satisfied in that : (a) the number of members of the

Class are so numerous that joinder of all members in the Class is impracticable ; (b) there

are questions of law and fact common to the Class ; (c) the claims of the Clas s

Representative are typical of the claims of the Class it seeks to represent ; (d) the Class

Representative has and will fairly and adequately represent the interests of the Class ; (e)

the questions of law and fact common to the members of the Class predominate over any

questions affecting only individual members of the Class ; and (f) a class action i s

superior to other available methods for the fair and efficient adjudication of th e

controversy.

3 . Pursuant to Rule 23 of the Federal Rules of Civil Procedure, th e

Court hereby finally certifies this action as a class action on behalf of a plaintiff class (the

"Class") consisting of all persons or entities who purchased the common stock of CV S

Corporation ("CVS") between February 6, 2001 and October 30, 2001, inclusive, an d

who were allegedly damaged thereby . Excluded from the Class are the Defendants, all o f

the officers, directors and partners thereof, members of their immediate families and thei r

legal representatives, heirs, successors or assigns and any entity in which any of th e

foregoing have or had a controlling interest . Also excluded from the Class are th e

persons and/or entities who previously excluded themselves from the Class by filing a

request for exclusion in response to the Notice of Pendency, as listed on Exhibit I

annexed hereto .

2


4. The Notice of the Proposed Settlement of Class Action, Motio n

For Attorneys' Fees, and Settlement Fairness Hearing, which was previously approved by

the Court, was given to all members of the Class who could be identified with reasonabl e

effort . The Court finds that the form of notice specified in the Court's Preliminar y

Approval Order has been given. The form and method of notice as so provide d

constituted the best notice practicable under the circumstances, satisfied the requirements

of Rule 23 of the Federal Rules of Civil Procedure, section 21 D(a)(7) of the Securitie s

Exchange Act of 1934, 15 U .S .C. 78u-4 (a)(7) as amended , and due process, and

constituted due and sufficient notice to all persons and entities entitled thereto .

5 . Pursuant to Rule 23 of the Federal Rules of Civil Procedure, th e

Court hereby approves the settlement set forth in the Securities Stipulation (th e

"Settlement") and finds that the Settlement is, in all respects, fair, reasonable and

adequate to members of the Class . The parties are authorized and directed to

consummate the Settlement in accordance with the terms and provisions of the Securitie s

Stipulation .

6. Except as to any individual claim of those persons who hav e

validly and timely requested exclusion from the Class, the Court hereby dismisses the

Securities Action with prejudice and without costs (except as otherwise provided in the

Securities Stipulation) as to any and all Settled Claims , including Unknown Claims, that

were or could have been asserted in the Securities Action by or on behalf of Lead

Plaintiff and the Class Members .

7. All Class Members and the successors and assigns of any of them ,

are hereby permanently barred and enjoined from instituting, commencing or prosecutin g

3


any and all claims, whether known or unknown (including Unknown Claims), an d

whether arising under federal, state, or any other law, against the Released Parties, whic h

have been, or could have been, asserted in the Securities Action or in any court or forum ,

relating to or arising from the acts, facts, transactions and circumstances that were allege d

in the Complaint and which relate to or arise from the purchase or sale of CVS commo n

stock during the Class Period (the "Settled Claims") . The "Released Parties" are any o f

the Defendants, and any of the families, heirs, executors, trustees, persona l

representatives, estates or administrators, attorneys, counselors, insurers, financial o r

investment advisors of any such Defendant who is a natural person, and the affiliates ,

partners, subsidiaries, predecessors, successors or assigns, past or present officers ,

directors, associates, controlling persons, representatives, employees, attorneys ,

counselors, insurers, financial or investment advisors, dealer managers, consultants ,

accountants, investment bankers, commercial bankers, engineers, advisors or agents o f

CVS, all in their capacities as such . The Settled Claims are hereby compromised, settled ,

released, discharged and dismissed as against the Released Parties on the merits and with

prejudice by virtue of the proceedings herein and this Order and Final Judgment .

"Settled Claims" do not include any claims against the Released Parties arising under th e

Employee Retirement Income Security Act of 1974, 29 U .S .C. § 1001, et seq . ("ERISA")

that are the subject of another class action pending in the United States District Court ,

District of Massachusetts, Fescina v. CVS Corp., et al . , Civil Action No . 04-12309-JLT ,

other than claims that the price of CVS common stock purchased on the open marke t

during the Class Period was artificially inflated as alleged in the Complaint .

4


8 . Upon the Effective Date, Lead Plaintiff and all Class Member s

shall be deemed to have covenanted not to sue any of the Released Parties in any

individual, class or other representative capacity with respect any Settled Claim .

9. The Defendants, the successors and assigns of any of them, and, t o

the extent of their authority to act on behalf of the Released Parties, the Released Parties ,

are hereby permanently barred and enjoined from instituting, commencing or prosecutin g

all claims, whether known or unknown ( including Unknown Claims), and whether arising

under federal, state, or any other law, which have been, or could have been, asserted i n

the Securities Action or in any court or forum , by the Defendants or any of them or th e

successors and assigns of any of them against any of the Plaintiffs, Class Members o r

their attorneys, which arise out of or relate in any way to the institution, prosecution, o r

settlement of the Securities Action (except for claims to enforce the Securities Stipulatio n

or the Settlement) (the "Settled Defendants' Claims") . The Settled Defendants' Claims

are hereby compromised , settled, released , discharged and dismissed on the merits and

with prejudice by virtue of the proceedings herein and this Order and Final Judgment .

10. This Order and Final Judgment, the Securities Stipulation and it s

exhibits, the terms and provisions thereof, and any of the negotiations or proceeding s

connected with them, and any of the documents or statements referred to therein shall no t

be :

(a) offered or received against any of the Defendants or other Release d

Parties as evidence of or a presumption, concession, or admission by any Defendant o r

other Released Party of the truth of any fact alleged by any of the plaintiffs or the validit y

of any claim that has been or could have been asserted in the Securities Action or in an y

5


litigation, or the deficiency of any defense that has been or could have been asserted i n

the Securities Action or in any litigation, or of any liability, negligence , fault, or

wrongdoing on the part of any of the Defendants or other Released Parties ;

(b) offered or received against any of the Defendants or other Release d

Parties as evidence of a presumption , concession or admission of any fault ,

misrepresentation or omission with respect to any statement or written documen t

approved or made by any Defendant or Released Party;

(c) offered or received against any of the Defendants or other Release d

Parties as evidence of a presumption, concession or admission with respect to an y

liability, negligence, fault or wrongdoing, or in any way referred to for any other reaso n

as against any of the Defendants or Released Parties, in any other civil, criminal o r

administrative action or proceeding, other than such proceedings as may be necessary t o

effectuate the provisions of the Securities Stipulation ; provided, however, that th e

Defendants and the Released Parties may refer to it to effectuate the liability protectio n

granted them hereunder;

(d) construed against the Defendants or other Released Parties as a n

admission or concession that the consideration to be given hereunder represents th e

amount which could or would have been recovered after trial in the Securities Action ; or

(e) construed as or received in evidence as an admission, concessio n

or presumption against plaintiffs or any of the Class Members that any of their claims ar e

without merit, or that any defenses asserted by the Defendants have any merit, or tha t

damages recoverable under the Complaint would not have exceeded the Settlement Fund .

6


11 . The Plan of Allocation is approved as fair and reasonable, and

Lead Plaintiff's Co-Lead Counsel and the Claims Administrator are directed t o

administer the Settlement in accordance with its terms and provisions .

12. The Court finds that all parties and their counsel have complie d

with each requirement of Rule 11 of the Federal Rules of Civil Procedure as to all

proceedings herein .

13 . Plaintiffs' Counsel are hereby awarded /o of th e

Settlement Fund in attorneys' fees, which sum the Court finds to be fair and reasonable,

and $ 1*✓~~ in reimbursement of expenses, which amounts shall be paid to Lead

Plaintiff's Co-Lead Counsel from the Settlement Fund with interest from the date suc h

Settlement Fund was funded to the date of payment at the same net rate that th e

Settlement Fund earns. The award of attorneys' fees shall be allocated among Plaintiffs '

Counsel in the Securities Action in a fashion which, in the opinion of Lead Plaintiffs Co-

Lead Counsel, fairly compensates Plaintiffs' Counsel for their respective contributions i n

the prosecution of the Securities Action . Attorneys' fees and expenses awarded by th e

court in the Derivative Action to derivative plaintiff's counsel in the amount up t o

$750,000 shall be payable from the award to Lead Plaintiff' s Co-Lead Counsel in th e

Securities Action .

14. In making this award of attorneys' fees and reimbursement o f

expenses to be paid from the Settlement Fund, the Court has considered and found that :

(a) the Settlement has created a fund of $110 million in cash (which i s

already on deposit), plus interest thereon, and that numerous Class Members who submi t

7


acceptable Proofs of Claim will benefit from the Settlement created by Lead Plaintiff s

Co-Lead Counsel ;

(b) Over 320,000 copies of the Settlement Notice were disseminated to

putative Class Members indicating that Plaintiffs' Counsel were moving for attorneys '

fees from the Settlement :Fund in an amount of up to twenty-five percent (25%) of th e

Settlement Fund and for reimbursement of their expenses in the approximate amount o f

$2,700,000 and two (2) objections were filed against the terms of the proposed

Settlement or the ceiling on the fees and expenses requested by Plaintiffs' Counse l

contained in the Notice ;

(c) Lead Plaintiff's Co-Lead Counsel have conducted the litigation

and achieved the Settlement with skill, perseverance and diligent advocacy ;

(d) The Securities Action involves complex factual and legal issue s

and was actively prosecuted over almost four years and, in the absence of a settlement ,

would involve further lengthy proceedings with uncertain resolution of the comple x

factual and legal issues ;

(e) Had Lead Plaintiffs Co-Lead Counsel not achieved the Settlement

there would remain a significant risk that Plaintiffs and the Class may have recovered les s

or nothing from the Defendants ; and

(f) The amount of attorneys' fees awarded and expenses reimbursed

from the Settlement Fund are consistent with awards in similar cases .


15 . Without affecting the finality of this Judgment in any way, the

Court hereby retains jurisdiction over (a) implementation of the Settlement and an y

award or distribution from the Settlement Fund ; (b) disposition of the Settlement Fund ;

(c) any application for fees and expenses incurred in connection with administering an d

distributing the settlement proceeds to the members of the Class ; and (d) over the parties

and Class Members for all matters relating to this Securities Action, including the

administration, interpretation, effectuation or enforcement of the Securities Stipulatio n

and this Order and Final Judgment .

16 . Without further order of the Court, the parties may agree t o

reasonable extensions of time to carry out any of the provisions of the Securities

Stipulation .

17 . There is no just reason for delay in the entry of this Order and

Final Judgment and immediate entry by the Clerk of the Cou rt is expressly directe d

pursuant to Rule 54 (b) of the Federal Rules of Civil Procedure .

7SO ORDERED this day of -V p 1 C "4WA , 2005.

Tlo'~U.S.D.J .

9


UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

—————————————————––––––––x

IN RE CVS CORPORATION SECURITIES LITIGATION

))))

C.A. No. 01-11464 (JLT)

—————————————————––––––––x

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF’S COUNSEL’S APPLICATION FOR AN AWARD OF ATTORNEYS’

FEES AND REIMBURSEMENT OF EXPENSES

MOULTON & GANS, P.C.

Nancy Freeman Gans BBO No. 184540 33 Broad Street Boston, M.A. 02109 (617) 369-7979 Liaison Counsel To Lead Plaintiff and the Class

MILBERG WEISS BERSHAD & SCHULMAN LLP Deborah Clark-Weintraub Jared Specthrie Michael Eisenkraft One Pennsylvania Plaza New York, NY 10119-0165 (212) 594-5300

SCHIFFRIN & BARROWAY, LLP Andrew L. Barroway Michael K. Yarnoff Benjamin J. Sweet 280 King of Prussia Road Radnor, Pennsylvania 19087 (610) 667-7706

Co-Lead Counsel for Lead Plaintiff and the Class Dated: August 31, 2005

Case 1:01-cv-11464-JLT Document 187 Filed 08/31/05 Page 1 of 36Case 1:09-cv-12146-GAO Document 495-2 Filed 09/22/14 Page 11 of 14

Plaintiff’s Counsel respectfully submit this memorandum of law in support of their

petition for an award of attorneys’ fees in the amount of 25% of the Gross Settlement Fund and

reimbursement of litigation expenses of $2,472,092.30 plus interest on expenses from the date

the Settlement was funded through the date of payment at the same net rate as the Settlement

Fund earns. Plaintiff’s Counsel’s application for an award of attorneys’ fees and reimbursement

of expenses is fully supported by the Lead Plaintiff, the Plumber & Pipefitter’s National Pension

Fund, as set forth in the accompanying Declaration of Louis P. Malone III In Support Of The

Proposed Settlement And Lead Counsel’s Application For Attorney Fees And Expenses

(hereinafter the “Malone Decl.”), and is consistent with recent fee awards in cases in which

comparable settlements have been obtained.

I. PRELIMINARY STATEMENT

As described more fully in the Declaration of Deborah Clark-Weintraub and Michael K.

Yarnoff In Support Of Proposed Class Action Settlement And Petition For An Award Of

Attorneys’ Fees and Reimbursement of Expenses (the “Joint Declaration”), by any measure, the

Settlement obtained in this case — consisting of $110,000,000 in cash — is an outstanding result

for Class Members.1 The Settlement is among the largest securities class action settlements to

date according to a recent report issued by Institutional Shareholder Services, a self-described

provider of proxy voting and corporate governance services, and is the third largest securities

class action settlement in this District. The outstanding nature of the recovery obtained in this

case is further confirmed by a recently published report by Cornerstone Research, Inc., which 1 The relevant factors supporting approval of Plaintiff’s Counsel’s request for attorneys’ fees and reimbursement of expenses are only summarized herein. Co-Lead Counsel respectfully refer the Court to the Joint Declaration for a detailed discussion of the factors supporting the requested fee and expense reimbursement.


- 18 -

multiplier”); Flight Transp. Corp. Sec. Litig., 685 F. Supp. 1092, 1096 (D. Minn. 1987) (“The

fact that counsel for the plaintiff classes prosecuted this case on a contingent fee basis warrants a

multiplier of the lodestar.”); In re Warner Commc’n Sec. Litig., 618 F. Supp. 735, 747 (S.D.N.Y.

1985), aff’d, 798 F.2d 35 (2d Cir. 1986) (“Numerous cases have recognized that the attorneys’

contingent fee risk is an important factor in determining the fee award.”) (citations omitted).

The enormous contingency risk in this case cannot be seriously disputed. Accordingly,

the risk of nonpayment also supports the requested fee award.

IV. A “CROSS-CHECK” OF PLAINTIFF’S COUNSEL’S LODESTAR DEMONSTRATES THE REASONABLENESS OF THE REQUESTED AWARD

While the percentage method is the preferred method of awarding attorneys’ fees in this

Circuit and the requested fee should be approved under that method, the fee request is also

reasonable when analyzed under the lodestar/multiplier method. To calculate attorneys’ fees

under the lodestar method, the Court must first determine the base amount of the fee based on the

number of hours counsel productively expended on the case at counsel’s hourly rate. See

Grendel’s Den, Inc. v. Larkin, 749 F.2d 945, 950-51 (1st Cir. 1984).

To compensate for the long delay in receiving any compensation for their work in this

case (nearly four years), it is appropriate to use Plaintiff’s Counsel’s current fee rates in

calculating the lodestar. See Missouri v. Jenkins, 491 U.S. 274, 283-84 (1989) (current rates,

rather than historical rates, should be applied in order to compensate for delay in payment);

LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 764 (2d Cir. 1998) (“[C]urrent rates, rather than

historical rates, should be applied in order to compensate for the delay in payment . . . .”).

In determining whether the rates are reasonable, the Court should take into account the

attorney’s legal reputation, experience, and status (partner or associate). In this case, Co-Lead

Counsel are two of the largest firms in the field of securities class action litigation, and the team


- 19 -

of lawyers working on the case included several highly experienced and respected securities

lawyers.11 In short, the experience and reputations of Plaintiff’s Counsel fully support the hourly

rates charged. Clearly, the Class received the highest quality representation in this case.

After the basic lodestar figure is calculated, the court considers whether an adjustment

should be made in the form of a multiplier to reflect the contingent nature of any fee, the delay in

payment, the quality of representation and the results obtained. Grendel’s Den, 749 F.2d at 951.

See also Lindy Bros. Builders v. Am. Radiator & Standard Sanitary Corp., 540 F.2d 102, 118 (3d

Cir. 1976) (introducing the “lodestar” method). The total lodestar reported by plaintiffs’ counsel

is $8,404,807.25. Thus, the percentage fee requested (25% of the Gross Settlement Fund)

represents a multiplier of only 3.27 to the cumulative lodestar of all Plaintiff’s Counsel. This

multiplier is more than merited by the results obtained, the quality of Plaintiff’s Counsel’s work,

and the wholly contingent nature of the representation in this case, and is well within the range of

multipliers awarded by courts within this Circuit and elsewhere, and particularly in settlements

of similar magnitude. See, e.g., In re Boston & Maine Corp., 778 F.2d 890, 894 (1st Cir. 1985)

(awarding a multiplier of 6); In re Charter Commc’n Inc., Sec. Litig., 2005 U.S. Dist. LEXIS

14772, at *56 (finding reasonable 5.6 multiplier on $146 million settlement fund); In re Xcel

Energy, Inc., 364 F. Supp. 2d 980, 998-99 (D. Minn. 2005) (awarding $25% of $80 million

settlement fund, representing 4.7 multiplier); In re Rite Aid Sec. Litig., 362 F. Supp. 2d 587 (E.D.

Pa. 2005) (6.96 multiplier on $126.6 million settlement fund); In re Buspirone Antitrust Litig.,

No. 01-MD-1410 (S.D.N.Y. Apr. 11, 2003) (multiplier of 8.46 where litigation proceeded into

significant merits discovery but not to trial); Maley, 186 F. Supp. 2d at 368-69 (finding a

11 The accompanying affidavits of Plaintiff’s Counsel contained in the Compendium include a description of the background and experience of the attorneys who worked on this case.


Exhibit 3


UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MASSACHUSETT S

IN RE LERNOUT & HAUSPIE ) CIVIL ACTION NO.SECURITIES LITIGATION ) 00-CV-11 589 (PBS)

THIS DOCUMENT RELATES TO : )ALL ACTIONS )

On the 20th day of December, 2004, a hearing having been held before this Court to

determine : (1) whether the terms and conditions of the Amended Stipulation and Agreement o f

Settlement with KPMG LLP, Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren ("KPMG

Belgium") and Paul Behets dated December 16, 2004 ( the "Stipulation") are fair , reasonable and

adequate for the settlement of all claims asserted by the Class against KPMG LLP, Klynveld Peat

Marwick Goerdeler Bedrijfsrevisoren and Paul Behets (collectively the "KPMG Defendants") i n

the First Consolidated and Amended Class Action Complaint (the "Complaint") now pending i n

this Court under the above caption , including the release of the KPMG Defendants and the

Released Parties, and should be approved; (2) whether judgment should be entered dismissin g

the claims asserted against the KPMG Defendants in the Complaint on the merits and with

prejudice in favor of the KPMG Defendants and as against all persons or entities who ar e

members of the Class herein who have not requested exclusion therefrom ; (3) whether to approv e

the Plan of Allocation as a fair and reasonable method to allocate the settlement proceeds amon g

the members of the Class; and (4) whether and in what amount to award Plaintiffs' Counsel fees

and reimbursement of expenses and compensatory awards . The Court having considered al l

- l -


matters submitted to it at the hearing and otherwise ; and it appearing that a notice of the hearing

substantially in the form approved by the Court was given to all persons or entities reasonabl y

identifiable who purchased the common stock of Lernout & Hauspie Speech Products N .V.

("L&H") on the NASDAQ Stock Market or who purchased L&H call options or sold L&H pu t

options on any United States-based options exchange between April 28, 1998 and November 9 ,

2000, inclusive (the "Class Period") ; and that a summary notice of the hearing substantially in th e

form approved by the Court was published in the national edition of The Wall Street Journal, The

Wall Street Journal Europe and the Belgian financial paper de Tiid pursuant to the specifications

of the Court; and the Court having considered and determined the fairness and reasonableness o f

the award of attorneys' fees ; and all capitalized terms used herein having the meanings as set

forth and defined in the Stipulation.

NOW, THEREFORE, IT IS HEREBY ORDERED THAT :

1 . The Court has jurisdiction over the subject matter of the Action, the Lead

Plaintiffs, all Class Members, and the KPMG Defendants .

2. The Court ce rt ifies the Class for settlement purposes only under Fed. R. Civ. P . 23

(a) and (b)(3) and, for that purpose, finds : (a) the number of Class Members is so numerous tha t

joinder of all members thereof is impracticable ; (b) there are questions of law and fact commo n

to the Class; (c) the claims of the Class Representatives are typical of the claims of the Class they

seek to represent ; (d) the Class Representatives have and will fairly and adequately represent the

interests of the Class ; (e) the questions of law and fact common to the members of the Clas s

predominate over any questions affecting only individual members of the Class ; and (f) a class

action is superior to other available methods for the fair and efficient adjudication of th e

-2-


controversy. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, Lead Plaintiffs Hans

A. Quaak, Attilio Po and Karl Leibinger, and representative MM Holdings, Inc . are certified as

Class Representatives .

3 . Pursuant to Rule 23 of the Federal Rules of Civil Procedure and for purposes of

this Settlement only, this Court hereby certifies this action as a class action insofar as the Action

relates to the claims asserted by the Class against the KPMG Defendants on behalf of all Class

Members who purchased the common stock of L&H on the NASDAQ Stock Exchange or who

purchased L&H call options or sold L&H put options on any United States-based option s

exchange between April 28, 1998 and November 9, 2000, inclusive . Excluded from the Clas s

are: (i) the KPMG Defendants, any partners or principals of KPMG LLP or KPMG Belgium,

members of their immediate families and their legal representatives, heirs, successors or assigns,

and any predecessors or successors of KPMG LLP or KPMG Belgium and any entity in which

any of the above persons or entities have or had a controlling interest ; (ii) KPMG International

and all KPMG International member firms ; (iii) Paul Behets and members of his immediate

family and his legal representatives, heirs, successors or assigns ; (iv) L&H and any predecessors

or successors of L&H ; (v) the officers and directors of L&H, members of their immediate

families and their legal representatives, heirs, successors or assigns and any entity in which any

of the above persons or entities have or had a controlling interest ; (vi) the Transactional

Plaintiffs, Rocker Plaintiffs and Trustee Plaintiffs ; and (vii) any defendants named in this Action

or in Quaak v. Dexia S .A., 03-CV-11566 (PBS) (D. Mass.) (the "Dexia Action"), members of

their immediate families and their legal representatives, heirs, successors or assigns and any

entity in which any defendant has or had a controlling interest . Also excluded from the Class ar e

-3-


the persons and/or entities who requested exclusion from the Class as listed on Exhibit A

annexed hereto .

4 . Notice of the pendency of this Action as a class action and of the propose d

Settlement was given to all Class Members who could be identified with reasonable effort . The

form and method of notifying the Class of the pendency of the action as a class action and of the

terms and conditions of the proposed Settlement met the requirements of Rule 23 of the Federa l

Rules of Civil Procedure, Section 21 D(a)(7) of the Securities Exchange Act of 1934, 15 U.S.C.

78u-4(a)(7), due process, and any other applicable law, constituted the best notice practicabl e

under the circumstances, and constituted due and sufficient notice to all persons and entitie s

entitled thereto .

5. The Settlement is approved as fair, reasonable and adequate, and the parties ar e

directed to consummate the Settlement in accordance with the terms and provisions of th e

Stipulation .

6. The claims asserted by Lead Plaintiffs and the Class against the KPMG

Defendants in the Complaint, which the Court finds was filed on a good faith basis in accordanc e

with the PSLRA and Rule 11 of the Federal Rules of Civil Procedure based upon all publicly

available information, are hereby dismissed with prejudice and without costs, except as provide d

in the Stipulation.

7 . Members of the Class and the successors and assigns of any of them are hereby

permanently barred and enjoined from instituting, commencing or prosecuting all claim s

(including "Unknown Claims" as defined in California Civil Code Section 1542), demands,

rights, liabilities, and causes of action of every nature and description whatsoever, known o r

-4-


unknown, whether or not concealed or hidden, asserted or that might have been asserted,

including, without limitation, claims for negligent misrepresentation, fraud, violations of any

state, federal or foreign statutes, rules or regulations of or by members of the Class as against the

Released Parties, arising out of the Class Members' purchases of L&H common stock on the

NASDAQ Stock Market or purchases of call options to acquire L&H common stock or sales of

put options related to L&H common stock on any United States-based options exchange during

the Class Period that have been or could have been asserted in any forum directly by the Class

Members against the Released Parties except claims relating to the enforcement of the settlement

of the Action (the "Settled Claims"). "Released Parties" means : (i) KPMG LLP, its

predecessors, successors and assigns and any current or former partners, principals, directors,

officers, employees, attorneys, agents, insurers, co-insurers, and reinsurers of KPMG LLP ; (ii)

Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren and all other Belgian legal entities entitled

to use the KPMG name, together with their affiliates and predecessors, successors and assigns or

any current or former partners, principals, directors, officers, employees, attorneys, agents,

insurers, co-insurers, and reinsurers of KPMG Belgium and such other Belgian legal entities and

affiliates ; (iii) KPMG International and all KPMG International member firms ; and (iv) Paul

Behets . It is understood that no named defendant in this Action or in the Dexia Action other tha n

the KPMG Defendants constitutes a Released Party within the meaning of this Order . The Settled

Claims are hereby compromised, settled, released, discharged and dismissed as against the

Released Parties on the merits and with prejudice by virtue of the proceedings herein and this

Order and Final Judgment .

8 . The KPMG Defendants and the successors and assigns of any of them, are hereb y

-5-


permanently barred and enjoined from instituting, commencing or prosecuting, either directly or

in any other capacity, any and all claims, rights or causes of action or liabilities whatsoever,

whether based on federal, state, local, statutory or common law or any other law, rule or

regulation, including both known claims and Unknown Claims, that have been or could have

been asserted in the Action or any forum by the KPMG Defendants or any of them or the

successors and assigns of any of them against any of the Lead Plaintiffs, MM Holdings, Inc . or

their attorneys, which arise out of or relate in any way to the institution, prosecution, or

settlement of the Action except claims relating to the enforcement of the settlement of the Action

(the "Settled Defendants' Claims") . The Settled Defendant's Claims of all of the Released

Parties are hereby compromised, settled, released, discharged and dismissed on the merits and

with prejudice by virtue of the proceedings herein and this Order and Final Judgment .

9. "Unknown Claims" means any and all Settled Claims which any plaintiff or Class

Member does not know or suspect to exist in his, her or its favor at the time of the release of the

Released Parties, and any Settled Defendants' Claims which one or more of the KPM G

Defendants do not know or suspect to exist in their favor, which if known by him, her or it might

have affected his, her or its decision(s) with respect to the Settlement . With respect to any and

all Settled Claims and Settled Defendants' Claims, the parties stipulate and agree that upon the

Effective Date, the Lead Plaintiffs, each Class Member and the KPMG Defendants shall b e

deemed to have, and by operation of the Judgment shall have, expressly waived any and all

provisions, rights and benefits conferred by any law of any state or territory of the United States,

or principle of common law, which is similar, comparable, or equivalent to Cal . Civ. Code §

1542, which provides :

-6-


A general release does not extend to claims which the creditor does not know or suspectto exist in his favor at the time of executing the release, which if known by him musthave materially affected his settlement with the debtor .

Lead Plaintiffs and the KPMG Defendants acknowledge, and Class Members by operation of la w

shall be deemed to have acknowledged, that the inclusion of "Unknown Claims" in the definitio n

of Settled Claims and Settled Defendants' Claims was separately bargained for and was a key

element of the Settlement .

10. The Judgments in the Action will bar all future claims for contribution, whethe r

arising under state, federal or common law : (a) against the Released Parties by any person o r

entity based upon, arising out of, relating to, or in connection with the Settled Claims of any

Class Member , or (b) by the Released Parties against any person or entity in relation to the

Payment .

11 . Neither this Order and Final Judgment, the Stipulation, nor any of its terms an d

provisions, nor any of the negotiations or proceedings connected with it, nor any of the

documents or statements referred to therein shall be :

(a) offered or received against the Released Parties as evidence of o r

construed as or deemed to be evidence of any presumption , concession, or admission by th e

Released Part ies with respect to the truth of any fact alleged by plaintiffs or the validity of any

claim that had been or could have been asserted in the Action or in any litigation, or the

deficiency of any defense that has been or could have been asserted in the Action or in an y

litigation, or of any liability, negligence, fault, or wrongdoing of the Released Parties ;

(b) offered or received against the Released Parties as evidence of a

presumption, concession or admission of any fault, misrepresentation or omission with respect t o

7-


any statement or written document approved or made by the Released Parties, or against th e

plaintiffs or any Class Member as evidence of any infirmity in the claims of plaintiffs or an y

Class Member ;

(c) offered or received against Released Parties or against the plaintiffs or any

Class Member as evidence of a presumption, concession or admission with respect to an y

liability, negligence , fault or wrongdoing , or in any way referred to for any other reason as

against any of the parties to the Stipulation, in any other civil, criminal or administrative actio n

or proceeding, other than such proceedings as may be necessary to effectuate the provisions o f

the Stipulation; provided, however, that the Released Parties may refer to the Stipulation t o

effectuate the liability protection granted it thereunder ;

(d) construed against Released Parties or the plaintiffs or any Class Members

as an admission or concession that the consideration to be given hereunder represents the amoun t

which could be or would have been recovered after trial ; or

(e) construed as or received in evidence as an admission, concession o r

presumption against plaintiffs or any Class Members or any of them that any of their claims ar e

without merit or that damages recoverable under the Complaint would not have exceeded th e

Payment .

12 . The Plan of Allocation is approved as fair and reasonable , and Plaintiffs' Counsel

and the Claims Administrator are directed to administer the Stipulation in accordance with it s

terms and provisions .

13 The Court finds that all parties and their counsel have complied with eac h

requirement of Rule 11 of the Federal Rules of Civil Procedure as to all proceedings herein .

-8-


14 Plaintiffs' Counsel are hereby awarded twenty percent (20%) of the Gros s

Settlement Fund in fees, which the Court finds to be fair and reasonable . This amount shall be

paid to Plaintiffs' Lead Counsel from the Settlement Fund with interest from the date suc h

Settlement Fund was funded to the date of payment at the same net rate that the Settlement Fund

earns . The award of attorneys' fees shall be allocated among Plaintiffs' Counsel in a fashion ,

which, in the opinion of Plaintiffs' Lead Counsel, fairly compensates Plaintiffs' Counsel for thei r

respective contributions in the prosecution of the Action . Because the Lead Plaintiffs are

continuing to pursue claims against the Remaining Defendants on behalf of the Class, Plaintiffs '

Counsel may seek reimbursement of certain expenses incurred after the date of the hearing (such

as expert expenses and costs incurred to provide notification of the certification of the Class) .

15 . The Court hereby takes under advisement Plaintiffs ' Counsels ' request for

reimbursement of expenses and costs incurred in providing Notice to the Class . The Court

further takes under advisement Lead Plaintiffs' request for a compensatory award .

16 . Exclusive jurisdiction is hereby retained over the parties and the Class Member s

for all matters relating to this Action, including the administration, interpretation, effectuation o r

enforcement of the Stipulation and this Order and Final Judgment, and including any applicatio n

for fees and expenses incurred in connection with administering and distributing the settlemen t

proceeds to the members of the Class .

IT All persons and/or entities listed on Exhibit A annexed hereto have timel y

requested exclusion from the Class and such request is hereby granted .

18 . Exhibit B annexed hereto is a list of all persons and/or entities who submitted

untimely and/or deficient requests for exclusion from the Class as of December 17, 2004 . These

-9-


untimely or otherwise invalid requests for exclusion are hereby denied .

19. Without further order of the Court, the part ies may agree to reasonable extension s

of time to carry out any of the provisions of the Stipulation .

20. There is no just reason for delay in the entry of this Order and Final Judgment

because entry of the Order and Final Judgment will facilitate the resolution of this Action agains t

the KPMG Defendants and will limit the expenditure of the resources of the Parties and th e

Court. Accordingly, immediate entry by the Clerk of the Court is expressly directed pursuant to

Rule 54(b) of the Federal Rules of Civil Procedure .

Dated : Boston , Massachusetts]?)~, L ,2004

HONORABLE PATTI B. SARISUNITED STATES DISTRICT JUDGE

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Case 1:00-cv-11589-PBS Document 912 Filed 12/09/04 Page 1 of 31Case 1:09-cv-12146-GAO Document 495-3 Filed 09/22/14 Page 12 of 14



Exhibit 4


Case 1:08-cv-12065-GAO Document 71 Filed 02/16/11 Page 1 of 4Case 1:09-cv-12146-GAO Document 495-4 Filed 09/22/14 Page 2 of 8







Exhibit 5


IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION In re REGIONS MORGAN KEEGAN SECURITIES, DERIVATIVE and ERISA LITIGATION This Document Relates to: In re Regions Morgan Keegan Closed-End Fund Litigation, No. 2:07-cv-02830-SHM-dkv

))))))))))

No. 2:09-2009 SMH V

ORDER APPROVING PROPOSED SETTLEMENT AND AWARD OF ATTORNEY’S FEES

AND EXPENSES

On behalf of the Class and the Subclass, Plaintiffs the

Lion Fund L.P., Dr. Samir J. Sulieman, and Larry Lattimore

(collectively, “Lead Plaintiffs”), and C. Fred Daniels in his

capacity as Trustee Ad Litem for the Leroy S. McAbee, Sr. Family

Foundation Trust (the “TAL”) (collectively with the Lead

Plaintiffs, “Plaintiffs”), filed a Motion on March 8, 2013, for

Final Approval of the Proposed Settlement and Plan of Allocation

entered into with Defendants Morgan Keegan & Co., Inc. (“Morgan

Keegan”), MK Holding, Inc., Morgan Asset Management, Inc.,

Regions Financial Corporation (“RFC”), the Closed-End Funds,

Allen B. Morgan, Jr., J. Kenneth Alderman, Brian B. Sullivan,

Joseph Thompson Weller, James C. Kelsoe, Jr., and Carter Anthony

(collectively, “Defendants”). (Mot. for Final App., ECF No.

Case 2:07-cv-02830-SHM-dkv Document 345 Filed 08/05/13 Page 1 of 22 PageID 13372Case 2:09-md-02009-SHM-dkv Document 364 Filed 08/06/13 Page 1 of 22 PageID 13978Case 1:09-cv-12146-GAO Document 495-5 Filed 09/22/14 Page 2 of 23

2

283.) Also before the Court is Plaintiffs’ Motion for Award of

Attorney’s Fees and Expenses. (Mot. for Atty. Fees, ECF No.

285.)

For the following reasons, Plaintiffs’ proposed Class is

CERTIFIED. Plaintiffs’ Motion for Final Approval is GRANTED.

Plaintiffs’ Motion for Attorney’s Fees and Expenses is GRANTED.

The parties’ joint Stipulation and Agreement of Settlement and

their Plan of Allocation are APPROVED.

I. Standard of Review

A. Approval of Settlement and Certification of Class

Under Federal Rule of Civil Procedure 23, a member of a

class may bring suit on behalf of all other members if:

(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). If these conditions are met a class action may be

maintained if:

(3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include: (A) the class members’ interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the


3

controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action. Fed. R. Civ. P. 23(b)(3). The “claims, issues, or defenses of a certified class may

be settled, voluntarily dismissed, or compromised only with the

court’s approval.” Fed. R. Civ. P. 23(e). When parties to a

class action seek to settle, the Court must comply with the

following procedures:

(1) The court must direct notice in a reasonable manner to all class members who would be bound by the proposal. (2) If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate. (3) The parties seeking approval must file a statement identifying any agreement made in connection with the proposal. (4) If the class action was previously certified under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so. (5) Any class member may object to the proposal if it requires court approval under this subdivision (e); the objection may be withdrawn only with the court’s approval.

Id. B. Attorney’s Fees and Expenses Under Rule 23(h), in a “certified class action, the court

may award reasonable attorney’s fees and nontaxable costs that

are authorized by law or by the parties’ agreement.” When

parties to a class action seek attorney’s fees and costs, the

Court must comply with the following procedures:


4

(1) A claim for an award must be made by motion under Rule 54(d)(2), subject to the provisions of this subdivision (h), at a time the court sets. Notice of the motion must be served on all parties and, for motions by class counsel, directed to class members in a reasonable manner. (2) A class member, or a party from whom payment is sought, may object to the motion. (3) The court may hold a hearing and must find facts and state its legal conclusions under Rule 52(a). (4) The court may refer issues related to the amount of the award to a special master or a magistrate judge, as provided in Rule 54(d)(2)(D).

Fed. R. Civ. P. 23(h). II. Analysis The Court has reviewed the record in this case, the joint

Stipulation and Agreement of Settlement, the Plan of Allocation,

all attached exhibits, the Plaintiffs’ Motions for preliminary

and final approval of the Settlement, the supporting memoranda,

and the written objections of Class Members. The Court has held

a Preliminary Fairness Hearing and a Final Approval Hearing.

(Prelim. Hearing, ECF No. 275; Final Hearing, ECF No. 312.) At

the Final Approval Hearing, the Court heard presentations from

the Lead Plaintiffs, TAL counsel, the Defendants, and objecting

Class Members as well as testimony from the Plaintiffs’ expert.

(Final Hearing.)

Based on its independent assessment of the record and the

information presented by the parties, the Court makes the

following findings and reaches the following conclusions.

A. Class Certification


5

The conditions of Rule 23(a) have been satisfied. There is

no dispute that the Class satisfies the numerosity, commonality,

and typicality requirements. At the time of the Final Approval

Hearing, the claims administrator had distributed nearly 100,000

class action notices to potential Class Members and more than

7,000 proofs of claim had been filed. All potential Class

Members had purchased or acquired shares of the Closed-End Funds

between 2003 and 2009.

After considering numerous motions for appointment, the

Court decided that the Lead Plaintiffs were best qualified to

represent the Class. (Order Appt. Counsel, ECF No. 179.) There

is no dispute about the adequacy of the Class representatives.

No party or Class Member has given the Court good cause to

believe that the Lead Plaintiffs have not fairly and adequately

protected the interests of the Class.

The conditions of Rule 23(b)(3) have been satisfied. The

injuries of the Class Members are the same in kind if not in

degree. The questions of law and fact common to the Class

predominate over any questions affecting only individual

members. Because there are so many potential Class Members, a

class action is superior to other available methods for the fair

and efficient adjudication of the controversy.

The Class is CERTIFIED as described in the Preliminary

Approval Order:


6

All Persons who purchased or otherwise acquired the publicly traded shares of (i) RMH between June 24, 2003 and July 14, 2009, inclusive, and were damaged thereby; (ii) RSF between March 18, 2004 and July 14, 2009, inclusive, and were damaged thereby; (iii) RMA between November 8, 2004 and July 14, 2009, inclusive, and were damaged thereby; (iv) RHY between January 19, 2006 and July 14, 2009, inclusive, or pursuant or traceable to the Registration Statement, Prospectus, and Statement of Additional Information (the “RHY Offering Materials”) filed by RHY on or about January 19, 2006 with the SEC, and were damaged thereby; and (v) all members of the TAL Subclass. Excluded from the Class and as Class Members are the Defendants; the members of the immediate families of the Defendants; the subsidiaries and affiliates of Defendants; any person who is an executive officer, director, partner or controlling person of the Closed-End Funds or any other Defendant (including any of its subsidiaries or affiliates, which include but are not limited to Morgan Asset Management, Inc., Regions Bank, Morgan Keegan, RFC, and MK Holding, Inc.); any entity in which any Defendant has a controlling interest; any Person who has filed a proceeding with FINRA against one or more Released Defendant Parties concerning the purchase of shares in one or more of the Closed-End Funds during the Class Period and such proceeding was not subsequently dismissed to allow the Person to specifically participate as a Class Member; any Person who has filed a state court action that has not been removed to federal court, against one or more of the Defendants concerning the purchase of shares in one or more of the Closed-End Funds during the Class Period and whose claims in that action have been dismissed with prejudice, released, or fully adjudicated absent a specific agreement with such Defendant(s) to allow the person to participate as a Class Member; and the legal representatives, heirs, successors and assigns of any such excluded person or entity. These exclusions do not extend to trusts or accounts as to which the control or legal ownership by any Defendant (or by any subsidiary or affiliate of any Defendant) is derived or arises from an appointment as trustee, custodian, agent, or other fiduciary (“Fiduciary Accounts”) unless with respect to any such Fiduciary Account any Person has filed a proceeding with FINRA against one or more Released Defendant Parties concerning the purchase of shares in one or more of the Closed-End Funds during the Class Period and such proceeding was not


7

subsequently dismissed to allow the Person to specifically participate as a Class Member; any Person who has filed a state court action that has not been removed to federal court, against one or more of the Defendants concerning the purchase of shares in one or more of the Closed-End Funds during the Class Period and whose claims in that action have been dismissed with prejudice, released, or fully adjudicated absent a specific agreement with such Defendant(s) to allow the Person to participate as a Class Member (and such exclusion shall apply to the legal representatives, heirs, successors and assigns of any such excluded Person, entity or Fiduciary Account). With respect to Closed-End Fund shares for which the TAL Orders authorize the Trustee Ad Litem to prosecute the claims or causes of action pleaded in the Complaint in the Action (“TAL Represented Closed-End Fund Shares”), “Class” and “Class Member” also excludes Persons who are, or were during the Class Period, trust and custodial account beneficiaries, principals, settlors, co-trustees, and others owning beneficial or other interests in the TAL Represented Closed-End Fund Shares (“Such Persons”), but this exclusion applies only to any claims or causes of action of Such Persons that the Trustee Ad Litem is not authorized by the TAL Orders to prosecute. With respect to Closed-End Fund Shares that are not TAL Represented Closed-End Fund Shares and in which Such Persons have a beneficial or other interest, the foregoing partial exclusion of Such Persons does not apply. Also excluded from the Class and as Class Members are those Persons who submit valid and timely requests for exclusion from the Class in accordance with the requirements set forth in the Notice.

(Prelim. Order, ECF No. 276.) Persons and entities who have been deemed excluded from

Class Membership are identified in the Court’s May 17, 2013 and

July 26, 2013 Orders, (ECF No. 330; ECF No. 344), and in the

Plaintiffs’ May 24, 2013 exhibit, (ECF No. 331-2).

B. Sufficiency of Notice

Due process requires that notice to a class be “reasonably

calculated, under all the circumstances, to apprise interested


8

parties of the pendency of the action and afford them an

opportunity to present their objections.” Vassalle v. Midland

Funding LLC, 708 F.3d 747, 759 (6th Cir. 2013) (internal

quotation marks and citations omitted)). “[A]ll that the notice

must do is fairly apprise the prospective members of the class

of the terms of the proposed settlement so that class members

may come to their own conclusions about whether the settlement

serves their interests.” Id. (internal quotation marks and

citations omitted).

The Court approved the Notice submitted by Plaintiffs at

the Preliminary Approval Hearing. (Prelim. Order.) The Notice

describes the nature of the class action, the proposed

settlement terms, the proposed Plan of Allocation, and the

requested attorney’s fees and expenses in detail. (Notice, ECF

No. 260-2.) The Notice is written to be understood by non-

attorneys. (Id.) The Court approved the proposed methods of

disseminating the Notice. At the time of the Final Approval

Hearing, the claims administrator had sent nearly 100,000

Notices by mail and had received more than 7,000 proofs of claim

in response. The Defendants had received more than 10,000

requests for share purchase and sale information in response to

the Notice. The Court received four timely and valid

objections, one untimely objection, and one invalid objection

from a non-class member.


9

The Notice was sufficient. The due process requirements

have been met.

C. Settlement Approval In compliance with Rule 23(e), the Court required the

Plaintiffs to send Notices of Class Action, Proofs of Claim, and

information about Requests for Exclusion to all Class Members by

means reasonably calculated to give them actual notice of the

pendency of the class action and the terms of the proposed

Settlement. (Prelim. Order); Fed. R. Civ. P. 23(e)(1). The

parties filed a Stipulation and Agreement of Settlement

identifying all agreements made in connection with the proposed

Settlement. (ECF No. 260); Fed. R. Civ. P. 23(e)(3). The Court

allowed all Class Members to file written objections to the

proposed Settlement and held a Final Approval Hearing at which

proper objectors were entitled to appear. (Prelim. Order; Final

Hearing); Fed. R. Civ. P. 23(e)(2), 23(e)(5).

The procedural requirements of Rule 23(a), (b), and (e)

have been satisfied. Final approval of the proposed Settlement

is warranted if the Court finds that the terms of the Settlement

are fair, reasonable, and adequate.

“A district court looks to seven factors in determining

whether a class action settlement is fair, reasonable, and

adequate: ‘(1) the risk of fraud or collusion; (2) the

complexity, expense and likely duration of the litigation; (3)


10

the amount of discovery engaged in by the parties; (4) the

likelihood of success on the merits; (5) the opinions of class

counsel and class representatives; (6) the reaction of absent

class members; and (7) the public interest.’” Vassalle, 708 F.3d

at 754-755 (quoting UAW v. GMC, 497 F.3d 615, 631 (6th Cir.

2007)). The Court has “‘wide discretion in assessing the weight

and applicability’ of the relevant factors.” Id. (quoting

Granada Invest., Inc. v. DWG Corp., 962 F.2d 1203, 1205-06 (6th

Cir. 1992)). Although the Court need not decide the merits of

the case or resolve unsettled legal questions, the Court cannot

“‘judge the fairness of a proposed compromise’ without ‘weighing

the plaintiff's likelihood of success on the merits against the

amount and form of the relief offered in the settlement.’” Id.

(quoting UAW, 497 F.3d at 631) (internal citations omitted).

The parties seek approval of a monetary Settlement in the

amount of $62,000,000.00. All of the UAW factors support the

fairness, reasonableness, and adequacy of the proposed

Settlement. The parties protected against the risk of fraud or

collusion by using a highly qualified and experienced

independent mediator during settlement negotiations. The

parties engaged in arms-length negotiations. The complexity and

expense of the litigation are evident. The litigation has been

pending for more than five-and-a-half years. The matter before

the Court represents a consolidation of seven cases; tens of


11

thousands of claims could be made on the settlement fund.

If the case were to proceed to trial, the Plaintiffs would

face a daunting task in establishing loss causation and

liability because there is evidence of both management failures

and market decline. The parties have stated that they will

proceed to trial if the proposed Settlement is rejected.

Although the case has not reached the summary judgment stage,

the Plaintiffs have completed a substantial amount of discovery

to support their loss valuation theory and their mediation

position. Because of the complexity of the case, discovery

costs would be much higher before the case could proceed to

trial.

The opinions of Class counsel and the reactions of Class

Members also support approval of the Settlement. Class counsel

have represented to the Court that, given the circumstances of

the case and the anticipated litigation risk, they believe they

have achieved the best possible result. From the tens of

thousands of potential Class Members, the Court has received

four valid and timely objections, one untimely objection, and

one invalid objection raised by a non-class member. (ECF No.

309.) The Court has considered all of the objections and heard

from two of the objectors at the Final Approval Hearing. None

of the objections has caused the Court to conclude that the

proposed Settlement is unfair, unreasonable, or inadequate.


12

Settlement is also in the public interest. It will

conserve judicial resources and permit monetary recovery for

potentially tens of thousands of individuals and entities. The

Release is narrow and does not implicate individuals or entities

with claims outside the Class.

“‘The most important of the factors to be considered in

reviewing a settlement is the probability of success on the

merits. The likelihood of success, in turn, provides a gauge

from which the benefits of settlement must be measured.’”

Poplar Creek Dev. Co. v. Chesapeake Appalachia, L.L.C., 636 F.3d

235, 245 (6th Cir. 2011) (quoting In re Gen. Tire & Rubber Co.

Sec. Litig., 726 F.2d 1075, 1086 (6th Cir. 1984)). The

Plaintiffs’ likelihood of success on the merits is questionable

for several reasons. First, the Defendants argue that they have

strong defenses but have chosen to settle because of the

projected costs of discovery, the uncertainty and disruption to

the Defendants’ ongoing businesses, and the risk of higher

damages. Second, the Defendants argue, and the Plaintiffs

admit, that the Plaintiffs did not have to show loss causation

to obtain the proposed Settlement. The Defendants contend that

loss causation would be difficult to prove under the

circumstances of this case. They argue that, if the Plaintiffs

were required to prove the portion of the loss attributable to

the Defendants, recovery would be significantly reduced. The


13

Defendants also argue that it would be difficult at trial for

the Plaintiffs to prove material fraudulent misrepresentations

and to establish that Morgan Keegan and RFC were controlling

persons of the Funds.

Finally, the Plaintiffs’ novel damages valuation

methodology could be excluded at trial for failure to satisfy

the expert testimony standard in Daubert v. Merrell Dow Pharms.,

Inc., 509 U.S. 579 (1993). “Before an expert may testify at

trial, the district ‘court must make a preliminary assessment of

whether the reasoning or methodology underlying the testimony is

scientifically valid and of whether that reasoning or

methodology properly can be applied to the facts in issue.’”

United States v. Watkins, 450 F. App’x 511, 515 (6th Cir. 2011)

(quoting United States v. Smithers, 212 F.3d 306, 313 (6th Cir.

2000) (internal quotations and citations omitted)). At the

Final Approval Hearing, the Plaintiffs’ expert described

substantial differences between the methodology he employed and

generally accepted methodologies. Plaintiffs’ expert admitted

that his method was otherwise untested and that it used daily

net asset values as a novel proxy for the potentially fraudulent

or misleading statements of Fund managers. It is possible that

the expert’s method would be found invalid. If the Plaintiffs’

damages valuations were excluded at trial, their likelihood of

success on the merits and the amount of any recovery would be


14

greatly reduced.

The proposed Settlement offers the Class Members a monetary

recovery for their monetary loss. Based on the information

presented by the parties and the objectors, counsel for the

Plaintiffs were able to negotiate a multi-million dollar

recovery for the Class based on a novel theory. The Plaintiffs’

expert testified that, under generally accepted damages

valuation models, the total loss to the Class attributable to

the Defendants would have been between one sixth and one third

of the proposed Settlement amount.

Although the proposed Settlement allows the Class Members

to recover, at best, 18% of their losses as alleged by the

Plaintiffs, monetary relief is guaranteed. The Plaintiffs could

succeed on the merits, but the likelihood is problematic and

their theory of recovery introduces unusual litigation risks.

Based on these considerations, the proposed Settlement confers a

substantial benefit on the Class Members.

The Sixth Circuit looks beyond the UAW factors when

evaluating the fairness of a settlement to determine whether the

proposed settlement “‘gives preferential treatment to the named

plaintiffs while only perfunctory relief to unnamed class

members.’” Vassalle, 708 F.3d at 755 (quoting Williams v.

Vukovich, 720 F.2d 909, 925 n.11 (6th Cir. 1983)). Under the

proposed Settlement, each Class Member receives a pro rata share


15

of the settlement fund based on the number of shares the Class

Member purchased. The parties have represented to the Court

that there is no side agreement promising a bonus or a different

type of relief to the named Plaintiffs.

The form and amount of recovery in the proposed Settlement

appropriately balance the risks of litigation. All of the UAW

factors weigh in favor of concluding that the proposed

Settlement is fair, reasonable, and adequate. Plaintiffs’

Motion for Final Approval is GRANTED. The Stipulation and

Agreement of Settlement and the Plan of Allocation are ADOPTED

and APPROVED.

E. Attorney’s Fees and Expenses

In compliance with Rule 23(h), the Plaintiffs have filed a

Motion for Award of Attorney’s Fees and Expenses that conforms

to the requirements of Rule 54(d)(2). (Mot. for Atty. Fees.)

Notice of the Motion was served on all parties through the

Court’s Electronic Filing Docket and on Class Members by mail.

(See ECF No. 301.) The Class Members and the Defendants were

given an opportunity to object to the Motion. (Prelim. Order.)

The Court heard argument from the Lead Plaintiffs, TAL Counsel,

Defendants, and several objectors at the Final Approval Hearing.

All of the procedural prerequisites to an award of

attorney’s fees and expenses have been satisfied. The question

is whether the attorney’s fees and expenses requested are


16

reasonable. In general, “there are two methods for calculating

attorney’s fees: the lodestar and the percentage-of-the-fund.”

Van Horn v. Nationwide Prop. & Cas. Ins. Co., 436 F. App’x 496,

498 (6th Cir 2011). “District courts have discretion ‘to select

the more appropriate method for calculating attorney’s fees in

light of the unique characteristics of class actions in general,

and of the unique circumstances of the actual cases before

them.’” Id. (quoting Rawlings v. Prudential-Bache Props., Inc.,

9 F.3d 513, 516 (6th Cir. 1993)). “The lodestar method better

accounts for the amount of work done, while the percentage of

the fund method more accurately reflects the results achieved.”

Rawlings, 9 F.3d at 516. A district court “generally must

explain its ‘reasons for adopting a particular methodology and

the factors considered in arriving at the fee.’” Id. (quoting

Moulton v. U.S. Steel Corp., 581 F.3d 344, 352 (6th Cir. 2009)).

Plaintiffs move the Court to approve a percentage-of-the-

fund, or common fund, award of attorney’s fees in the amount of

$18,600,000.00, or 30% of the total common fund. (Mem. in Supp.

of Mot. for Atty. Fees, ECF No. 86.) The Plaintiffs contend

that the reasonableness of their request is supported by a

“lodestar cross-check,” a method by which the party requesting

an award works backward from the requested amount to determine

the multiplier that would be necessary to reach that amount if

the party had instead used the lodestar method to determine the


17

requested fee. (Id.) If the resulting multiplier is within the

accepted range, it supports the party’s contention that its fee

request is reasonable. (Id.)

To recover attorney’s fees under the common fund doctrine,

“(1) the class of people benefitted by the lawsuit must be small

in number and easily identifiable; (2) the benefits must be

traceable with some accuracy; and (3) there must be reason for

confidence that the costs can in fact be shifted with some

exactitude to those benefitting.” Geier v. Sundquist, 372 F.3d

784, 790 (6th Cir. 2004). These factors are not satisfied

“‘where litigants simply vindicate a general social grievance,’”

but are satisfied “‘when each member of a certified class has an

undisputed and mathematically ascertainable claim to part of a

lump-sum judgment recovered on his behalf.’” Id. (quoting

Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). For that

reason, “the common fund method is often used to determine

attorney’s fees in class action securities cases.” Id.

The instant class action is a securities case. Each Class

Member who submits a proper proof of claim will receive a pro

rata share of the settlement fund based on the number of shares

the Member purchased during the Class Period. Although the

Class is large, each Class Member is easily identifiable and the

benefit to each Member is easily traceable to the work of

Plaintiffs’ counsel. Because recovery is pro rata, if the


18

common fund method is applied, each Class Member will in effect

pay a portion of the attorney’s fees and expenses based on the

size of the Class Member’s recovery.

The common fund method is the more appropriate method for

calculating attorney’s fees in this case. “In common fund

cases, the award of attorney’s fees need only ‘be reasonable

under the circumstances.’” Id. (quoting Rawlings, 9 F.3d at

516). “The ‘majority of common fund fee awards fall between 20%

and 30% of the fund.’” Gooch v. Life Investors Ins. Co. of Am.,

672 F.3d 402, 426 (quoting Waters v. Int’l Precious Metals

Corp., 190 F.3d 1291, 1294 (11th Cir. 1999)). Although the

Court may award fees in its discretion, it should consider:

(1) the value of the benefit rendered to the plaintiff class; (2) the value of the services on an hourly basis; (3) whether the services were undertaken on a contingent fee basis; (4) society’s stake in rewarding attorneys who produce such benefits in order to maintain an incentive to others; (5) the complexity of the litigation; and (6) the professional skill and standing of counsel involved on both sides.

Moulton, 581 F.3d at 352 (quoting Bowling v. Pfizer, Inc., 102

F.3d 777, 780 (6th Cir. 1996)).

In this case, there is no dispute that the litigation is

complex, that counsel for all parties are highly skilled and

nationally well-regarded, and that counsel for the Plaintiffs

undertook a substantial risk and bore considerable costs by

accepting this case on a contingent fee basis. The requested


19

fee is within the typical range for awards in common fund cases,

and society has a clear stake in rewarding attorneys as an

incentive to take on complicated, risky, contingent fee cases.

The value of Plaintiffs’ legal services on an hourly basis

is established by their lodestar cross-check. See Johnson v.

Midwest Log. Sys., No. 2:11-CV-1061, 2013 U.S. Dist. LEXIS

74201, at *16 (S.D. Ohio May 25, 2013). “In contrast to

employing the lodestar method in full, when using a lodestar

cross-check, the hours documented by counsel need not be

exhaustively scrutinized by the district court.” Id. at *17

(internal quotations and citations omitted). Plaintiffs spent

approximately 13,000 hours in preparation for this case,

producing a cumulative lodestar value of $5,980,680.50. (ECF

No. 287-1.) Each firm comprising Plaintiffs’ counsel submitted

an accounting of the hourly rate and hours spent for each

attorney who worked on the case. (ECF No. 287-6; ECF No. 287-7;

ECF No. 287-8.) The hours spent and the rates applied are

reasonable. The resulting lodestar multiplier is approximately

3.1. “Most courts agree that the typical lodestar multiplier in

a large post-PSLRA securities class action[] ranges from 1.3 to

4.5.” In re Cardinal Health Inc. Sec. Litigs., 528 F. Supp. 2d

752, 767 (S.D. Ohio 2007) (collecting cases). The lodestar

cross-check multiplier is within the reasonable range.

The most important factor in determining the reasonableness


20

of the requested attorney’s fees in this case is the value of

the benefit conferred on the Class. This is a complex case, and

the Plaintiffs’ likelihood of success on the merits is in

question. Nevertheless, Plaintiffs’ counsel was able to

negotiate a multimillion-dollar settlement on a novel theory of

recovery to be distributed pro rata to all Class Members.

Plaintiffs’ counsel created substantial value for the Class

Members. Had the litigation proceeded on an accepted damages

valuation theory, the total recovery was projected to be from

one third to as little as one sixth of the proposed settlement

fund. If the case had proceeded to trial, the Class Members

faced a substantial risk of no recovery at all.

The Plaintiffs also seek payment of expenses from the

common fund totaling $380,744.14. (ECF No. 287.) The

Plaintiffs state that approximately $277,000.00 represents

payments to experts, approximately $17,000.00 represents the

costs of mediation, and the remainder includes photocopying,

travel, and lodging. (Id.) The Plaintiffs have submitted

itemized lists of all expenses. (ECF No. 287-6; ECF No. 287-7;

ECF No. 287-8.) No objections have been raised to the

Plaintiffs’ expenses. After review of the Plaintiffs’

submissions, the Court finds that the requested expenses are

reasonable and should be paid from the common fund.

The Plaintiffs’ requested attorney’s fees and expenses are


21

reasonable under the unique circumstances of this case. The

common fund method is the more appropriate method of addressing

attorney’s fees. All of the Bowling factors weigh in favor of

the requested fee of 30% of the fund, $18,600,000.00.


III. Dismissal of Claims and Release

Except as to any individual claim of those persons who have

been excluded from the Class, this action, together with all

claims asserted in it, is dismissed with prejudice by the

Plaintiffs and the other members of the Class against each and

all of the Defendants. The Parties shall bear their own costs,

except as otherwise provided above or in the joint Stipulation

and Agreement of Settlement and the Plan of Allocation.

After review of the record, including the Complaint and the

dispositive motions, the Court concludes that, during the course

of this action, the parties and their respective counsel have

complied at all times with the requirements of Rule 11.

The Release submitted by the parties as part of Exhibit B

to the joint Stipulation and Agreement of Settlement, (ECF No.

260-5), is APPROVED and ADOPTED by the Court.

IV. Continuing Jurisdiction

The Court retains jurisdiction for purposes of effecting

the Settlement, including all matters relating to the

administration, consummation, enforcement, and interpretation of


22

the joint Stipulation and Agreement of Settlement and the Plan

of Allocation.

V. Conclusion

For the foregoing reasons, Plaintiffs’ proposed Class is

CERTIFIED. Plaintiffs’ Motion for Final Approval is GRANTED.


The parties’ Stipulation and Agreement of Settlement and their

Plan of Allocation are APPROVED. The Class settlement fund is

approved in the amount of $62,000,000.00. Attorney’s fees are

approved in the amount of $18,600,000.00. Expenses are approved

in the amount of $380,744.14. All claims in this matter are

DISMISSED except as provided above.

So ordered this 5th day of August, 2013.

s/ Samuel H. Mays, Jr.____ SAMUEL H. MAYS, JR. UNITED STATES DISTRICT JUDGE


Exhibit 6


UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

IN RE MBIA, INC., SECURITIES File No. 08-CV -264-KMK LITIGATION

_)r'~l ORDER AWARDING ATTORNEYS' FEES AND EXPENSES

This matter came on for hearing on December 15, 2011 (the "Settlement Hearing") on

Lead Counsel's motion to determine whether and in what amount to award Lead Counsel in the

above-captioned consolidated class action (the "Action") attorneys' fees and reimbursement of

Litigation Expenses. The Court having considered all matters submitted to it at the Settlement

Hearing and otherwise; and it appearing that notice of the Settlement Hearing substantially in the

form approved by the Court was mailed to all Class Members who or which could be identified

with reasonable effort, except those persons or entities excluded from the definition of the Class,

and that a summary notice of the hearing substantially in the form approved by the Court was

published in Investor's Business Daily and was transmitted over the P R Newswire pursuant to the

specifications of the Court; and the Court having considered and determined the fairness and

reasonableness of the award of attorneys' fees and Litigation Expenses requested.

NOW, THEREFORE, IT IS HEREBY ORDERED THAT:

1. This Order incorporates by reference the definitions in the Stipulation and

Agreement of Settlement dated September 6, 2011 (ECF No. 73-1) (the "Stipulation") and all

terms not otherwise defined herein shall have the same meanings as set forth in the Stipulation.

2. The Court has jurisdiction to enter this Order and over the subject matter of the

Action and all parties to the Action, including all Class Members.

Case 7:08-cv-00264-KMK Document 92 Filed 12/20/11 Page 1 of 4Case 1:09-cv-12146-GAO Document 495-6 Filed 09/22/14 Page 2 of 5

3. Notice of Lead Counsel's application for attorneys' fees and reimbursement of

Litigation Expenses was given to all Class Members who could be identified with reasonable

effort. The form and method of notifying the Class of the application for attorneys' fees and

expenses satisfied the requirements of Rule 23 of the Federal Rules of Civil Procedure, the

Private Securities Litigation Reform Act of 1995 (15 U.S.c. § 78u-4(a)(7)), due process, the

Rules of the Court, and all other applicable law and rules, constituted the best notice practicable

under the circumstances, and constituted due and sufficient notice to all persons and entities

entitled thereto.

4. Lead Counsel is hereby awarded attorneys' fees in the amount of 2.'6. % of

the Settlement Fund, which sum the Court finds to be fair and reasonable, and

$ G,O-') ':t S"l· ,,() in reimbursement of Litigation Expenses, which fees and expenses

shall be paid to Lead Counsel from the Settlement Fund

5. Lead Plaintiff, the Teachers' Retirement System of Oklahoma, is hereby awarded

$ rs-; O()O. (J)O from the Settlement Fund as reimbursement for its reasonable costs and

expenses directly related to its representation of the Class.

6. In making this award of attorneys' fees and reimbursement of expenses to be paid

from the Settlement Fund, the Court has considered and found that:

(a) The Settlement has created a fund of $68 million in cash that has been

funded into an escrow account pursuant to the terms of the Stipulation, and that numerous Class

Members who submit acceptable Proof of Claim Forms will benefit from the Settlement that

occurred because of the efforts of Lead Counsel;

(b) The fee sought by Lead Counsel has been reviewed and approved as fair

and reasonable by the Court-appointed Lead Plaintiff, a sophisticated institutional investor that

was substantially involved in all aspects of the prosecution and resolution of the Action;

2


(c) Copies of the Notice were mailed to over 120,800 potential Class

Members or their nominees) stating that Lead Counsel would apply for attorneys' fees in an i::'h( amount of 22% of the Settlement Fund and reimbursement of Litigation Expenses in an amount

not to exceed $750,000, and there are no objections to the requested award of attorneys' fees or

Litigation Expenses;

(d) Lead Counsel has conducted the litigation and achieved the Settlement

with skill, perseverance and diligent advocacy;

(e) The Action involves complex factual and legal issues and was actively

prosecuted for over two years;

(f) Had Lead Counsel not achieved the Settlement there would remain a

significant risk that Lead Plaintiff and the other members of the Class may have recovered less or

nothing from the Defendants;

(g) Lead Counsel devoted over 11,000 hours, with a lodestar value of

approximately $5,181,000, to achieve the Settlement; and

(h) The amount of attorneys' fees awarded and expenses to be reimbursed

from the Settlement Fund are fair and reasonable and consistent with awards in similar cases.

7. Any appeal or any challenge affecting this Court's approval regarding any

attorneys' fees and expense application shall in no way disturb or affect the finality of the

Judgment.

8. Exclusive jurisdiction is hereby retained over the parties and the Class Members

for all matters relating to this Action, including the administration, interpretation, effectuation or

enforcement of the Stipulation and this Order.

3


9. In the event that the Settlement is tenninated or the Effective Date of the

Settlement otherwise fails to occur, this Order shall be rendered null and void to the extent

provided by the Stipulation.

10. There is no just reason for delay in the entry of this Order, and immediate entry

by the Clerk of the Court is expressly directed.

SO ORDERED this I f:\-tL. day of bt:a..•..I\A.r ,2011.

#604596

4


Exhibit 7


Case 1:08-cv-02233-VM Document 198 Filed 11/18/11 Page 1 of 3Case 1:09-cv-12146-GAO Document 495-7 Filed 09/22/14 Page 2 of 6



UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK MICHAEL RUBIN,

Plaintiff,

v.

MF GLOBAL, LTD., et al.,

Defendants.

: : : : : : : : : : : :

Case No. 08 Civ. 2233 (VM)

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’ COUNSEL’S PETITION FOR AN AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF EXPENSES

AND LEAD PLAINTIFFS’ PETITION FOR REIMBURSEMENT OF EXPENSES


I. INTRODUCTION

Lead Plaintiffs, the Iowa Public Employees’ Retirement System, the Policemen’s

Annuity & Benefit Fund of Chicago, the Central States, Southeast and Southwest Areas Pension

Fund, and the State-Boston Retirement System (collectively, “Lead Plaintiffs”1), respectfully

submit this memorandum in support of Plaintiffs’ Counsel’s petition for an award of attorneys’

fees and reimbursement of expenses as well as Lead Plaintiffs’ request for reimbursement of

their expenses including lost wages.2

Having achieved a significant, $90 million cash benefit for the Settlement Class,

Plaintiffs’ Counsel seek attorneys’ fees of 18% of the Settlement Fund and reimbursement of

expenses, plus interest from the date of funding at the same rate earned by the Settlement Fund.

The requested attorneys’ fees award represents a multiplier of 2.67 based on Plaintiffs’ Counsel’s

lodestar of $6,076,530.25 (for 11,055 hours of work by attorneys and other professionals). See

Joint Declaration of Daniel E. Bacine and Carol V. Gilden (“Joint Decl.”), filed herewith, ¶ 60 &

Ex. 6 (attaching declarations of each of Plaintiffs’ Counsel).3

In light of the risks faced, the complexity of the case, the quality of legal work

performed, the amount of time and effort expended by Plaintiffs’ Counsel, and the size of the fee

in relation to the Settlement achieved, the fee request of 18% of the Settlement Fund is both fair

1 All capitalized terms not otherwise defined herein have the same meanings as set forth in the Stipulation and Agreement of Settlement (the “Stipulation”), dated August 10, 2011, and filed with the Court on August 11, 2011 (ECF No. 188-1). 2 “Plaintiffs’ Counsel” are co-lead counsel Cohen Milstein Sellers & Toll PLLC (“Cohen Milstein”) and Barrack, Rodos & Bacine (“Barrack Rodos”), along with additional plaintiffs’ counsel, Labaton Sucharow LLP (“Labaton”). 3 Barrack Rodos spent 5,273.75 hours litigating this action for a lodestar of $2,979,055.00; Cohen Milstein spent 2,891.40 hours litigating this action for a lodestar of $1,544,493.25; and Labaton spent 2,889.90 hours litigating this action for a lodestar of $1,552,982.00. Joint Decl. Ex. 6.


Exhibit 8


Case 1:08-cv-03758-VM -JCF Document 117 Filed 07/20/11 Page 1 of 7Case 1:09-cv-12146-GAO Document 495-8 Filed 09/22/14 Page 2 of 8







Exhibit 9


UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

In re MoneyGram International, Inc. Securities Litigation

) ) ) ) ) ) ) ) ) ) ) )

Consolidated Case No.: Civ. No. 08-883 (DSD/JJG)

FINAL ORDER AND JUDGMENT

WHEREAS, on March 9, 2010, Lead Plaintiff, on behalf of itself and the Class, on

the one hand, and MoneyGram International, Inc. (“MoneyGram” or the “Company”),

William J. Putney, Jean C. Benson, Philip W. Milne, David J. Parrin, Douglas L. Rock,

Donald E. Kiernan, Othón Ruiz Montemayor, Albert M. Teplin, and Monte E. Ford

(collectively, the “Defendants”), on the other hand, executed a Stipulation and Agreement

of Settlement (the “Stipulation”) that would resolve the above-captioned action (the

“Action”) for payment of $80,000,000 on behalf of the Released Persons (the

“Settlement”).

WHEREAS, this Court preliminarily approved the Settlement by Order of the

Court dated March 10, 2010 (Docket No. 159);

CASE 0:08-cv-01034-DSD-JJG Document 60 Filed 06/18/10 Page 1 of 22Case 1:09-cv-12146-GAO Document 495-9 Filed 09/22/14 Page 2 of 26

2

WHEREAS, after a hearing before this Court on the 18th day of June, 2010 (the

“Fairness Hearing”), to (i) determine whether the Settlement should be approved by the

Court as fair, reasonable and adequate; (ii) determine whether judgment should be

entered pursuant to the Stipulation, inter alia, dismissing the Actions against Defendants

with prejudice and extinguishing and releasing all Settled Claims (as defined therein)

against all Released Persons; (iii) determine whether the Class should be finally certified

for settlement purposes pursuant to Federal Rules of Civil Procedure 23(a)(1-4) and

(b)(3); (iv) rule on Lead Counsel’s application for an award of attorneys’ fees and the

reimbursement of litigation expenses and Lead Plaintiff’s application for reimbursement

of expenses; and (v) rule on such other matters as the Court may deem appropriate.

The Court has considered all matters submitted to it at the Fairness Hearing and

otherwise, the pleadings on file, the applicable law, and the record.


1. The Court, for purposes of this Final Order and Judgment (the

“Judgment”) adopts all defined terms as set forth in the Stipulation, and incorporates

them herein by reference as if fully set forth.

2. The Court has jurisdiction over the subject matter of the Action and

the Parties, including Lead Plaintiff and all Class Members.

3. The Court finds that the prerequisites for a class action under Federal

Rules of Civil Procedure 23(a) and (b)(3) have been satisfied in that: the number of Class

Members is so numerous that joinder of all Class Members is impracticable; there are

questions of law and fact common to the Class; the claims of Lead Plaintiff are typical of


3

the claims of the Class they seek to represent; Lead Plaintiff and Lead Counsel have at all

times fairly and adequately represented the interests of the Class; and a class action is

superior to other available methods for the fair and efficient adjudication of the

controversy, considering: (a) the interests of the Class Members in individually

controlling the prosecution or of separate actions, (b) the extent and nature of any

litigation concerning the controversy already commenced by members of the Class, (c)

the desirability or undesirability of continuing the litigation of these claims in this

particular forum, (d) and the difficulties likely to be encountered in the management of a

class action.

4. Pursuant to Federal Rule of Civil Procedure 23(b)(3), the Court has

certified, for settlement purposes only, a Class that shall consist of all persons and entities

who purchased or otherwise acquired MoneyGram Securities during the Class Period

(January 24, 2007 through March 25, 2008). Excluded from the Class are: (i)

Defendants; (ii) all officers, directors, and partners of any Defendant and of any

Defendant’s partnerships, subsidiaries, or affiliates; (iii) Thomas H. Lee Partners, L.P.,

and any of its officers, directors, and partners, subsidiaries, affiliates, members, investors,

or partnerships; (iv) Goldman Sachs & Co. and any of its officers, directors, and partners,

subsidiaries, affiliates, members, or partnerships; (v) members of the immediate family of

any of the foregoing excluded persons and entities; (vi) the legal representatives, heirs,

successors, and assigns of any of the foregoing excluded persons and entities; (vii) any

entity in which any of the foregoing excluded persons and entities has or had a

controlling interest. Also excluded from the Class are any putative members of the Class


4

who excluded themselves by timely requesting exclusion in accordance with the

requirements set forth in the Notice, as listed on Exhibit 1 annexed hereto.

5. The Notice, the Publication Notice and the notice methodology

implemented pursuant to the Stipulation and the Court’s orders (i) constituted the best

notice practicable under the circumstances to all persons within the definition of the

Class, (ii) constituted notice that was reasonably calculated, under the circumstances, to

apprise Class Members of the pendency of the Action, of the effect of the Stipulation,

including releases, of their right to object to the proposed Settlement, of their right to

exclude themselves from the Class, and of their right to appear at the Fairness Hearing,

(iii) were reasonable and constituted due, adequate and sufficient notice to all persons or

entities entitled to receive notice and (iv) met all applicable requirements of the Federal

Rules of Civil Procedure, the United States Constitution (including the Due Process

Clause), Section 21D(a)(7) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u-

4(a)(7), as amended, including by the Private Securities Litigation Reform Act of 1995

(the “PSLRA”), the Rules of the Court and any other applicable law.

6. Pursuant to and in accordance with Rule 23 of the Federal Rules of

Civil Procedure, the Settlement, including, without limitation, the Settlement Amount,

the releases set forth therein, and the dismissal with prejudice of the Settled Claims

against the Released Persons set forth therein, is finally approved as fair, reasonable and

adequate. The Parties are hereby authorized and directed to comply with and to

consummate the Settlement in accordance with the Stipulation, and the Clerk of this

Court is directed to enter and docket this Judgment in the Action.


5

7. The Action and the Complaint and all claims included therein, as

well as all of the Settled Claims (defined in the Stipulation and in Paragraph 8(c) below),

which the Court finds was filed against Defendants on a good faith basis by Lead

Plaintiff and Lead Counsel in accordance with the PSLRA and Rule 11 of the Federal

Rules of Civil Procedure based upon all publicly available information, are dismissed

with prejudice as to Lead Plaintiff and all other members of the Class, and as against each

and all of the Released Persons (defined in the Stipulation and in Paragraph 8(a) below).

Regardless of whether or not a member of the Class receives any distributions from the

Settlement, or executes and delivers the Proof of Claim provided for in the Stipulation,

each and all Class Members who have not validly and timely requested exclusion, on

behalf of themselves and their respective predecessors, successors and assigns, are hereby

deemed to have finally, fully, and forever released, relinquished, and discharged all of the

Released Persons from the Settled Claims. The Parties are to bear their own costs, except

as otherwise provided in the Stipulation.

8. As used in this Judgment, the terms “Released Persons,” “Related

Persons,” “Settled Claims,” “Settled Defendants’ Claims,” and “Unknown Claims” shall

have the meanings set forth below:

a. “Released Persons” means MoneyGram, the Individual Defendants,

the Carriers, and the Related Persons;

b. “Related Persons” means each of MoneyGram’s or an Individual

Defendant’s past or present directors, officers, employees, partners (general

or limited), principals, members, managing members, insurers and co-


6

insurers (including but not limited to the Carriers), re-insurers, controlling

shareholders, attorneys, advisors, accountants, auditors, personal or legal

representatives, predecessors, successors, divisions, joint ventures, assigns,

spouses, heirs, executors, parents, subsidiaries, affiliates (including the

offices and directors of such parents, subsidiaries, and affiliates), any entity

in which MoneyGram or an Individual Defendant has a controlling interest,

any member of any Individual Defendant’s immediate family, or any trust

of which any Individual Defendant is the settlor or which is for the benefit

of any member of an Individual Defendant’s immediate family.

c. “Settled Claims” means Settled Defendants’ Claims and Settled

Plaintiffs’ Claims.

d. “Settled Defendants’ Claims” means and includes any and all claims

(including Unknown Claims, as defined below), debts, demands,

controversies, obligations, losses, costs, rights or causes of action or

liabilities of any kind or nature whatsoever (including, but not limited to,

any claims for damages (whether compensatory, special, incidental,

consequential, punitive, exemplary or otherwise), injunctive relief,

declaratory relief, rescission or rescissionary damages, interest, attorneys’

fees, expert or consulting fees, costs, expenses, or any other form of legal

or equitable relief whatsoever), whether based on federal, state, local,

foreign, statutory or common law or any other law, rule or regulation,

whether fixed or contingent, accrued or unaccrued, liquidated or


7

unliquidated, at law or in equity, matured or unmatured, that have been or

could have been asserted in the Action or any forum by the Released

Persons against any of the Lead Plaintiff, Lead Counsel, Class Members or

their attorneys, which arise out of or relate in any way to the institution,

prosecution, or settlement of the Action. Notwithstanding the foregoing, or

any other provision contained in this Stipulation, Settled Defendants’

Claims shall not include any claims to enforce the Settlement, including,

without limitation, any of the terms of this Stipulation or of any orders or

judgments issued by the Court in connection with the Settlement.

e. “Settled Plaintiffs’ Claims” means and includes any and all claims

(including Unknown Claims), rights, debts, demands, controversies,

obligations, losses, costs, suits, matters, issues, or causes of action

(including, but not limited to, any claims for damages (whether

compensatory, special, incidental, consequential, punitive, exemplary or

otherwise), injunctive relief, declaratory relief, rescission or rescissionary

damages, interest, attorneys’ fees, expert or consulting fees, costs,

expenses, or any other form of legal or equitable relief whatsoever), under

federal, state, local, foreign law, or any other law, rule, or regulation,

whether known or unknown, that were, could have been, or could in the

future be asserted against the Released Persons, as defined above, by

Plaintiffs in any court of competent jurisdiction or any other adjudicatory

tribunal, in connection with, arising out of, related to, based upon, in whole


8

or in part, directly or indirectly, in any way, to the facts, transactions,

events, occurrences, acts, disclosures, oral or written statements,

representations, filings, publications, disseminations, press releases,

presentations, accounting practices or procedures, compensation practices

or procedures, omissions or failures to act or to disclose which were or

which could have been alleged or described in this Class Action by

Plaintiffs. The Settled Plaintiffs’ Claims include, but are not limited to, any

and all claims related to or arising out of the Company’s public filings,

press releases or other public statements or disseminations, the Company’s

accounting for and valuation of the securities held in its investment

portfolio, the Company’s finances, accounting practices or procedures

generally, and any direct claims for breach of fiduciary duty, insider

trading, misappropriation of information, failure to disclose, omission or

failures to act, abuse of control, breach of MoneyGram’s policies or

procedures, waste, mismanagement, gross mismanagement, unjust

enrichment, misrepresentation, fraud, breach of contract, unfair business

practices and unfair competition, negligence, breach of duty of care or any

other duty, violations of law, money damages, injunctive relief, corrective

disclosure, damages penalties, disgorgement, restitution, interest, attorneys’

fees, expert or consulting fees, and any and all other costs, expenses or

liability whatsoever, whether based on federal, state, local, foreign,

statutory, common law, or any other law, rule or regulation, whether fixed


9

or contingent, accrued or un-accrued, liquidated or unliquidated, at law or

inequity, matured or un-matured, including both known claims and

Unknown Claims that were or that could have been alleged in the

Consolidated Amended Complaint in this Action. Settled Plaintiffs’ Claims

shall not include:

(i) any claims to enforce the Settlement, including, without

limitation, any of the terms of this Stipulation or of any orders or

judgments issued by the Court in connection with the Settlement;

(ii) any claims asserted by persons who exclude themselves from

the Class by timely requesting exclusion in accordance with the

requirements set forth in the Notice; or

(iii) any claims, rights or causes of action that have been or could

have been asserted on behalf of MoneyGram in the purported

Derivative Actions or by individuals pursuant to ERISA.

f. “Unknown Claims” means any and all claims that the Lead Plaintiff

or any Class Member does not know or suspect to exist and any and all

claims that MoneyGram or any Individual Defendant does not know or

suspect to exist in his, her or its favor at the time of the release of the

Released Persons which, if known by him, her or it, might have affected

his, her or its settlement with and release of, as applicable, the Released

Persons, Lead Plaintiff, and Class Members, or might have affected his, her

or its decision to object or not to object to this Settlement. The parties may


10

hereafter discover facts in addition to or different from those which he, she,

or it now knows or believes to be true with respect to the subject matter of

the Settled Claims, but the parties shall expressly, fully, finally and forever

settle and release, and the Parties, upon the Effective Date, shall be deemed

to have, and by operation of the Judgment the parties shall have fully,

finally, and forever settled and released any and all Settled Claims, known

or unknown, suspected or unsuspected, contingent or non-contingent,

whether or not concealed or hidden, which now exist, or heretofore have

existed, upon any theory of law or equity now existing or coming into

existence in the future, including, but not limited to, conduct which is

negligent, reckless, intentional, with or without malice, or a breach of any

duty, law or rule, without regard to the subsequent discovery or existence of

such different or additional facts. Accordingly, with respect to any and all

Settled Claims, the Parties stipulate and agree that, upon the Effective Date,

the Parties shall expressly waive and each of the Class Members shall be

deemed to have, and by operation of the Judgment shall have, waived all

provisions, rights and benefits of California Civil Code § 1542 and all

provisions, rights and benefits conferred by any law of any state or territory

of the United States, or principle of common law, or foreign law which is

similar, comparable or equivalent to California Civil Code § 1542.

California Civil Code § 1542 provides:


11

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

The Parties expressly acknowledge, and the Class Members shall be

deemed to have, and by operation of the Judgment shall have

acknowledged, that the waiver and release of Unknown Claims constituting

Settled Claims was separately bargained for and a material element of the

Settlement.

9. In accordance with 15 U.S.C. § 78u-4(f)(7)(A), any and all claims

for contribution arising out of the claims or allegations of the Action or any Settled Claim

(i) by any person or entity against any of the Released Persons, and (ii) by any of the

Released Persons against any person or entity other than a person or entity whose liability

has been extinguished by the settlement of the Released Person, are hereby permanently

barred, extinguished, discharged, satisfied, and unenforceable.

10. Any Class Member receiving notice of the Notice, or having actual

knowledge of the Notice, or having actual knowledge of sufficient facts that would cause

such person to be charged with constructive notice of the Notice and who did not

properly request to be excluded from the Class in accordance with the process set forth in

the Notice, is permanently barred, enjoined, and restrained from commencing,

prosecuting, continuing, or asserting any Settled Plaintiffs’ Claims against the Released

Persons, or from receiving any benefits or other relief from, any other lawsuit, arbitration


12

or other proceeding or order in any jurisdiction that is based upon any Settled Plaintiffs’

Claims.

11. Lead Plaintiff and all Class Members on behalf of themselves, their

personal representatives, heirs, executors, administrators, trustees, successors and assigns,

with respect to each and every Settled Plaintiffs’ Claim, release and forever discharge,

and are forever barred, enjoined, and restrained from commencing, prosecuting,

continuing, or asserting any and all Settled Plaintiffs’ Claims against any of the Released

Persons, and shall not institute, continue, maintain or assert, either directly or indirectly,

whether in the United States or elsewhere, on their own behalf or in a representative

capacity on behalf of any class or any other person or entity, any action, suit, cause of

action, claim or demand against any Released Person or any other person who may claim

any form of contribution or indemnity from any Released Person in respect of any Settled

Plaintiffs Claim.

12. The Defendants, on behalf of themselves, their personal

representatives, heirs, executors, administrators, trustees, successors and assigns, release

and forever discharge each and every one of the Settled Defendants’ Claims, and are

forever enjoined from prosecuting the Settled Defendants’ Claims against Lead Plaintiffs,

all Class Members and their respective counsel

13. Notwithstanding ¶¶ 11-12 herein, nothing in this Judgment shall bar

any action or claim by any of the Parties or the Released Persons to enforce or effectuate

the terms of the Stipulation or this Judgment.


13

14. Only those Class Members filing valid and timely Proofs of Claim

shall be entitled to receive any distributions from the Settlement. The Proofs of Claims to

be executed by the Class Members shall contain a release whereby all Released Persons

will be released from all Settled Plaintiffs’ Claims. The Proof of Claim shall be

substantially in the form and content of Tab 2 of the Order for Notice and Hearing.

15. This Judgment and the Stipulation, including any provisions

contained in the Stipulation, any negotiations, statements, or proceedings in connection

therewith, or any action undertaken pursuant thereto:

a. shall not be offered or received against, or otherwise

prejudice, any Released Person as evidence of or construed as

or deemed to be evidence of any presumption, concession, or

admission by the Released Persons with respect to the truth

of any fact alleged by any of the plaintiffs or the validity of

any claim that has been or could have been asserted in the

Action or in any other action, or the deficiency of any

defense that has been or could have been asserted in the

Action or in any other action, or of any liability, negligence,

fault, damage, or wrongdoing of or by any Released Person;

b. shall not be offered or received against, or otherwise

prejudice, any Released Person as evidence of or be

construed as or deemed to be evidence of, any presumption,

concession or admission of any fault, misrepresentation or


14

omission with respect to any statement or written document

approved or made by any Released Person;

c. shall not be offered or received against, or otherwise

prejudice, any Released Person as evidence of a presumption,

concession or admission with respect to any liability,

negligence, fault or wrongdoing in any other civil, criminal or

administrative, arbitral or action or proceeding; provided,

however, that the Released Persons may offer or refer to the

Stipulation to effectuate the terms of the Stipulation,

including the releases granted them thereunder, and may file

the Stipulation and/or this Judgment in any action that may

be brought against them in order to support a defense or

counterclaim based on principles of res judicata, collateral

estoppel, full faith and credit, release, good faith settlement,

judgment bar or reduction or any other theory of claim

preclusion or issue preclusion or similar defense or

counterclaim;

d. shall not be construed against, or otherwise prejudice, any

Released Person as an admission or concession that the

consideration to be given hereunder represents the amount

that could be or would have been recovered after trial; and


15

e. shall not be construed as or received in evidence as an

admission, concession or presumption against the Lead

Plaintiff or any of the Class Members that any of their claims

are without merit, or that any defenses asserted by

Defendants have any merit, or that damages recoverable

under the Action would not have exceeded the Settlement

Amount.

16. The Court hereby appoints Rust Consulting, Inc. as Claims

Administrator and Wells Fargo Bank, N.A. as Escrow Agent.

17. The Plan of Allocation is approved as fair and reasonable, and Lead

Counsel and the Claims Administrator are directed to administer the Settlement in

accordance with the terms and provisions of the Stipulation.

18. The Court finds that all Parties and their counsel have complied

with each requirement of the PSLRA and Rules 11 and 37 of the Federal Rules of Civil

Procedure as to all proceedings herein and that Lead Plaintiff and Lead Counsel at all

times acted in the best interests of the Class and had a good faith basis to bring, maintain

and prosecute this Action as to each Defendant in accordance with the PSLRA and

Federal Rule of Civil Procedure 11. The Court further finds that Lead Plaintiff and Lead

Counsel adequately represented the Class Members for entering into and implementing

the Settlement.

19. Only those Class Members who submit valid and timely Proofs of

Claim shall be entitled to receive a distribution from the Net Settlement Fund. The Proof


16

of Claim to be executed by the Class Members shall further release all Settled Claims

against the Released Persons. All Class Members shall be bound by all of the terms of

the Stipulation and this Judgment, including the releases set forth herein, whether or not

they submit a valid and timely Proof of Claim, and shall be barred from bringing any

action against any of the Released Persons concerning the Settled Claims.

20. No Class Member shall have any claim against Lead Counsel, the

Claims Administrator, or other agent designated by Lead Counsel based on the

distributions made substantially in accordance with the Settlement and Plan of Allocation

as approved by the Court and further orders of the Court.

21. Neither the Defendants, nor their counsel, shall have any

responsibility for, interest in, or liability whatsoever with respect to: (a) the provisions of

the Notice, locating Class Members, soliciting Settlement claims or claims

administration; (b) the design, administration or implementation of the Plan of

Allocation; (c) the determination or administration of taxes; (d) any act, omission or

determination of Lead Counsel, the Escrow Agent or the Claims Administrator, or any of

their respective designees or agents, in connection with the administration of the

Settlement or otherwise; (e) the management, investment or distribution of the Gross

Settlement Fund and/or the Net Settlement Fund; (f) the Plan of Allocation; (g) the

determination, administration, calculation or payment of claims asserted against the

Gross Settlement Fund and/or the Net Settlement Fund; (h) the administration of the

Escrow Account; (i) any losses suffered by, or fluctuations in the value of, the Gross

Settlement Fund and/or the Net Settlement Fund; or (j) the payment or withholding of


17

any Taxes, expenses and/or costs incurred in connection with the taxation of the Gross

Settlement Fund and/or the Net Settlement Fund or the filing of any tax returns; or (k)

any expenses, costs, or losses incurred in connection with any of the above.

22. No Class Member shall have any claim against the Defendants,

Defense counsel, or any of the Released Persons with respect to: (a) any act, omission or

determination of Lead Counsel, the Escrow Agent or the Claims Administrator, or any of

their respective designees or agents, in connection with the administration of the

Settlement or otherwise; (b) the management, investment or distribution of the Gross

Settlement Fund and/or the Net Settlement Fund; (c) the Plan of Allocation; (d) the

determination, administration, calculation or payment of claims asserted against the

Gross Settlement Fund and/or the Net Settlement Fund; (e) the administration of the

Escrow Account; (f) any losses suffered by, or fluctuations in the value of, the Gross

Settlement Fund and/or the Net Settlement Fund; or (g) the payment or withholding of

any Taxes, expenses and/or costs incurred in connection with the taxation of the Gross

Settlement Fund and/or the Net Settlement Fund or the filing of any tax returns.

23. Any order approving or modifying the Plan of Allocation set forth in

the Notice, or the application by Lead Counsel for an award of attorneys’ fees and

reimbursement of expenses or any request of Lead Plaintiff for reimbursement of

reasonable costs and expenses shall not disturb or affect the Finality of this Judgment, the

Stipulation or the Settlement contained therein.

24. The Notice stated that Lead Counsel would move for attorneys’ fees

not to exceed 25% of the Gross Settlement Fund and reimbursement of expenses from the


18

Gross Settlement Fund in a total amount not to exceed $650,000. However, in their

Motion for Final Approval, Lead Counsel only requested attorney’s fees of 24.8% of the

Settlement Fund and $579,426.79 for reimbursement of expenses. Furthermore, on June

9, 2010, Lead Counsel filed a Report with the Court (Docket No. 180) stating that it was

modifying its fee request to $19,000,000.00, or 23.75% of the Settlement Fund.

25. Lead Counsel is hereby awarded a total of $579,426.79 in

reimbursement of expenses. Lead Counsel is hereby awarded attorneys’ fees in the

amount of $19,000,000.00 of the Settlement Fund, which sum represents 23.75% of the

Settlement Fund, and which sum the Court finds to be fair and reasonable. The foregoing

awards of fees and expenses shall be paid to Lead Counsel from the Gross Settlement

Fund, and such payment shall be made at the time and in the manner provided in the

Stipulation, with interest from the date the Gross Settlement Fund was funded to the date

of payment at the same net rate that interest is earned by the Gross Settlement Fund. The

appointment and distribution among Lead Counsel of any award of attorneys’ fees shall

be within Lead Counsel’s sole discretion.

26. Lead Plaintiff is hereby awarded $10,000.00 for its costs and

expenses directly relating to the representation of the Class, which the Court finds is fair

and reasonable and allowed by 15 U.S.C. § 78u-4(a)(4), plus accrued interest, which sum

the Court finds to be fair and reasonable. The foregoing awards of costs and expenses

shall be paid to Lead Plaintiff from the Gross Settlement Fund, and such payment shall be

made at the time and in the manner provided in the Stipulation, with interest from the


19

date the Gross Settlement Fund was funded to the date of payment at the same net rate

that interest is earned by the Gross Settlement Fund.

27. In making this award of attorneys’ fees and reimbursement of

expenses to be paid from the Gross Settlement Fund, the Court has considered and found

that:

a. the Settlement has created a fund of $80,000,000 in cash that

is already on deposit, plus interest thereon, and that numerous

Class Members who submit acceptable Proofs of Claim will

benefit from the Settlement;

b. Over 73,000 copies of the Notice were disseminated to

putative Class Members stating that Lead Counsel were

moving for attorneys’ fees not to exceed 25% of the Gross

Settlement Fund and reimbursement of expenses from the

Gross Settlement Fund in a total amount not to exceed

$650,000;

c. No Class Member filed an objection to the Settlement,

Notice, Reimbursement to Lead Plaintiff, Plan of Allocation

or Lead Plaintiff’s Counsel’s request for Reimbursement of

Expenses;

d. One (1) potential Class Member filed objections to the

request for an award of attorney’s fees and the mechanism by

which any undistributed proceeds might be donated to a


20

charity; the objections were filed on June 4, 2010, on behalf

of the Steven D. & Yuki Emmet, M.D., Inc. Pension PSP

Trust Dated 10/01/84 (Docket No. 178); that objection was

withdrawn and no consideration of any type was paid or

offered to be paid to objector or its counsel (Docket No. 181);

the Court hereby grants the withdrawal of the objection;

e. Lead Counsel has conducted the litigation and achieved the

Settlement in good faith and with skill, perseverance and

diligent advocacy;

f. The Action involves complex factual and legal issues and

was actively prosecuted for nearly two years and, in the

absence of a settlement, would involve further lengthy

proceedings with uncertain resolution of the complex factual

and legal issues;

g. Had Lead Counsel not achieved the Settlement there would

remain a significant risk that the Lead Plaintiff and the Class

may have recovered less or nothing from the Defendants;

h. Lead Counsel has advanced in excess of the requested

$650,000.00 in costs and expenses to fund the litigation of

this Action; and

i. The amount of attorneys’ fees awarded and expenses

reimbursed from the Gross Settlement Fund are fair and


21

reasonable under all of the circumstances and consistent with

awards in similar cases.

28. Without affecting the Finality of this Judgment in any way, the

Court reserves exclusive and continuing jurisdiction over the Action, the Lead Plaintiff,

the Class, and the Released Persons for purposes of: (a) supervising the implementation,

enforcement, construction, and interpretation of the Stipulation, the Plan of Allocation,

and this Judgment; (b) hearing and determining any application by Lead Counsel for an

award of attorneys’ fees, costs, and expenses and/or reimbursement to Lead Plaintiff, if

such determinations were not made at the Fairness Hearing; (c) supervising the

distribution of the Gross Settlement Fund and/or the Net Settlement Fund; and (d)

resolving any dispute regarding a party’s right to terminate pursuant to the terms of the

Stipulation.

29. In the event that the Settlement is terminated or does not become

Final in accordance with the terms of the Stipulation for any reason whatsoever, then this

Judgment shall be rendered null and void and shall be vacated to the extent provided by

and in accordance with the Stipulation, including Lead Counsel and Lead Plaintiff’s

obligations to return any awards by the Court, and the parties shall return to their

positions as provided for in the Settlement.

30. In the event that, prior to the Effective Date, Lead Plaintiff or

MoneyGram institutes any legal action against the other to enforce any provision of the

Stipulation or this Judgment or to declare rights or obligations thereunder, the successful

Party or Parties shall be entitled to recover from the unsuccessful Party or Parties


22

reasonable attorneys’ fees and costs incurred in connection with any such action. The

Individual Defendants shall have no obligation under this paragraph.

31. There is no reason for delay in the entry of this Judgment and

immediate entry by the Clerk of the Court is expressly directed pursuant to Rule 54(b) of

the Federal Rules of Civil Procedure.

Signed this the 18th day of June, 2010.

It is so ORDERED.

s/ David S. Doty David S. Doty United States District Judge


UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

In re MoneyGram International, Inc.

Securities Litigation

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Consolidated Case No.: Civ. No. 08-883

(DSD/JJG)

LEAD PLAINTIFF’S MEMORANDUM OF LAW IN SUPPORT OF MOTION

FOR FINAL APPROVAL OF THE SETTLEMENT AND FOR AN AWARD OF

ATTORNEY’S FEES, REIMBURSEMENT OF EXPENSES, AND

REIMBURSEMENT TO LEAD PLAINTIFF

________________________________________________________________________


1

I.

PRELIMINARY STATEMENT1

Lead Counsel, Nix Patterson & Roach, L.L.P. and Counsel, Chestnut Cambronne

PA (collectively “Lead Plaintiff‟s Counsel”), for Lead Plaintiff Oklahoma Teachers‟

Retirement System (“OTRS”) respectfully submit this memorandum of law in support of

granting: (1) final certification of a settlement class and appointing OTRS class

representative and Nix, Patterson & Roach, LLP class counsel; (2) final approval of the

$80 million Settlement2 as fair, reasonable, and adequate under Federal Rule of Civil

Procedure 23; (3) an award of attorney‟s fees; (4) reimbursement of expenses; and (5)

reimbursement to OTRS.

Lead Plaintiff‟s Counsel and OTRS have achieved an extraordinary recovery of

$80 million on behalf of the Class. Whether viewed in terms of actual dollars or

percentage of total damages recovered, the Settlement represents a remarkable recovery.3

Perhaps the best evidence that the recovery obtained for the Class is truly

remarkable is the response of the Class members themselves. As of the filing of this

Memorandum, approximately 73,126 Notice Packets have been mailed to potential Class

1Instead of filing two separate briefs—one in support of final approval and one in support

of an award of attorney‟s fees and expenses—Lead Plaintiff‟s Counsel submits the instant

joint brief in support of both. Because the instant brief exceeds the 12,000 word limit,

Lead Plaintiff‟s Counsel is filing contemporaneously herewith a motion to expand the

word limit.

2The term “Settlement” refers to the Stipulation and Agreement of Settlement dated

March 9, 2010 previously filed with the Court. See Docket No. 155. 3Notably, the settlement achieved here equals the amount achieved and approved by this

Court in In re Xcel Energy, Inc. Sec., Derivative & “ERISA” Litig., 364 F. Supp. 2d 980

(D. Minn. 2005), in which Chestnut Cambronne served as lead counsel.


55

1157). Nevertheless, the lodestar cross-check does not trump the court‟s primary reliance

on the percentage of the common fund method. In re Xcel, 364 F. Supp. 2d at 999 (citing

In re Rite Aid Corp. Sec. Litig., 396 F.3d 294, 307 (3d Cir. 2005)). The Eighth Circuit

has identified four factors in setting a reasonable lodestar fee: (1) the number of hours

counsel expended; (2) the “reasonable hourly rate;” (3) the contingent nature of the

success; and (4) the quality of the attorneys‟ work. UnitedHealth Group, Inc. PSLRA

Litig., 643 F. Supp. 2d at 1106 (citing Grunin, 512 F.2d at 127).

Lead Plaintiff‟s Counsel spent approximately 10,031 hours litigating this matter,

yielding a lodestar of $4,794,690.00. See Joint Decl. at ¶¶ 79-80. Based on the lodestar

and hourly rates submitted, a multiplier of 4.14 results from awarding 24.8% of the $80

million settlement fund as attorney‟s fees.

Courts have awarded fees based on the percentage method that result in multipliers

in excess of four. See, e.g., UnitedHealth Group, Inc. PSLRA Litig., 643 F. Supp. 2d at

1106 (awarding fees that resulted in a 6.5 multiplier); In re Xcel, 364 F. Supp. 2d at 999

(awarding fees that resulted in a 4.7 multiplier); In re Brocade Sec. Litig., No. 3:05-CV-

02042-CRB (N.D. Cal. Jan. 26, 2009) (Breyer, J.) (awarding fees that resulted in a 3.5

multiplier) (Bores Decl. Ex. A).

The lodestar cross-check, therefore, confirms the reasonableness of the requested

attorney‟s fee award for the reasons stated above, including the contingent and risky

nature of the case and the excellent results achieved through the skilled and competent

work of Lead Plaintiff‟s Counsel. This Court should exercise its discretion and conclude,

when cross-checked against the lodestar, the requested attorney fee award is reasonable


Exhibit 10


Case 1 :04-cv-01773-DAB Document 170 Filed 07/18/2007

ORIGINALUNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

In re AMERICAN EXPRESS FINANCIALADVISORS SECURITIES LITIGATION

Page 1 of 10

USDC SDNY

DOCUMENT

11"0 :g Q

Master File No. 04 Civ. 1773 (DAB)

ORDER AND FINAL JUDGMENT

On July 13, 2007, the Court held a hearing to determine (1) whether the terms and

conditions of the Stipulation of Settlement dated January 18, 2007 ("Stipulation")' are fair,

reasonable, and adequate for the settlement of all claims asserted on behalf of the Class in the

above-captioned Action, including the release of Defendants , Nominal Defendants , and the other

Released Persons, and should be approved; (2) whether judgment should be entered dismissing

the Action on the merits and with prejudice in favor of Defendants and Nominal Defendants and

as against all Class Members who are not Opt-Outs; (3) whether the Plan of Allocation proposed

by Plaintiffs' Co-Lead Counsel is a fair , reasonable , and adequate method of allocating the

settlement proceeds among the Class Members; (4) whether and in what amount Plaintiffs'

Co-Lead Counsel should be awarded attorneys' fees and reimbursement of expenses; and (5)

whether and in what amount incentive awards should be given to the lead plaintiffs in the instant

action and in a related action , known as Haritos v. American Express Financial Advisors, Inc.,

Case No. 02-2255 PHX-PGR, pending in the United States District Court for the District of

Arizona ("Haritos").

1. All defined terms have the same meaning as defined in the Stipulation of Settlement

dated January 18, 2007.


Case 1 :04-cv-01773-DAB Document 170 Filed 07/18/2007 Page 2 of 10

The Court, having considered all matters submitted to it at the hearing and otherwise; and

it appearing from the submissions of the parties that, in accordance with the Court's Order

Provisionally Certifying Class, Directing Dissemination of Notice, and Setting Settlement

Fairness Hearing, dated February 14, 2007 ("Notice Order"), a notice of the Settlement and Final

Fairness Hearing, substantially in the form approved by the Court, was mailed to all Class

Members who could be identified with reasonable effort, using the information provided by

Defendant American Express Financial Advisors, Inc. or its successor, Ameriprise Financial

Services , Inc. (collectively, "AEFA"), pursuant to the Notice Order ; and it appearing that a

summary notice of the Settlement and Final Fairness Hearing, substantially in the form approved

by the Court, was published once in the national edition of The Wall Street Journal and Parade

Magazine in accordance with the Notice Order; and the Court having considered and determined

the fairness and reasonableness of the award of attorneys' fees and expenses requested by

Plaintiffs' Co-Lead Counsel; and all defined terms used herein having the meanings as set forth

and defined in the Stipulation,


The Court has jurisdiction over the subject matter of the Action, Plaintiffs, all

Class Members, and Defendants.

2. The Court makes a final determination that, for the purposes of the Settlement, the

prerequisites for a class action under Rules 23(a) and (b)(3) of the Federal Rules of Civil

Procedure have been satisfied in that (a) the Class is so numerous that joinder of all members

thereof is impracticable; (b) there are questions of law and fact common to the Class;

(c) Plaintiffs' claims are typical of the claims of the Class they seek to represent; (d) Plaintiffs

and their counsel will fairly and adequately represent the interests of the Class; (e) questions of

2



law and fact common to the Class Members predominate over questions affecting only

individual members of the Class; and (f) a class action settlement is superior to other available

methods for the fair and efficient adjudication of the controversy.

3. Pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure, and,

for the purposes of the Settlement, this Court hereby makes final its certification of the Action as

a class action on behalf of the following Class:

All Persons who, at any time during the Class Period:

(i) Paid a fee for financial advice, financial planning, or Financial Advisory

Services;

(ii) Purchased any of the Non-Proprietary Funds through AEFA or for which

AEFA was listed as the broker;

(iii) Purchased any of the AXP Funds through AEFA or for which AEFA was

listed as the broker; and/or;

(iv) Paid a fee for financial advice, financial planning, or other financial

advisory services rendered in connection with an SPS, WMS and/or SMA

account.

Excluded from the Class are Defendants, Nominal Defendants, members of Defendant James M.

Cracchiolo's immediate family, any entity in which any Defendant or Nominal Defendant has or

had a controlling interest, and the employees, agents, legal affiliates, or representatives who had

been employees, agents, legal affiliates or representatives during the Class Period, heirs,

controlling persons, successors, and predecessors in interest or assigns of any such excluded

party, and all persons and entities who timely and properly requested exclusion from the Class

pursuant to the Mailed Notice or Publication Notice disseminated in accordance with the Notice

3



Order, and six persons whose tardy exclusions are excused due to extenuating circumstances.

Those six persons are : Carroll Neinhaus, James King, Dorothy King, Muriel Wester, Joseph

Centineo and Ester Saabye.

4. Plaintiffs assert claims against Defendants under Sections 12(a)(2) and 15 of the

Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Securities and

Exchange Commission Rules lOb-5(a)-(c) and lOb-10 promulgated thereunder; Section 20(a) of

the Securities Exchange Act of 1934; the Investment Advisers Act of 1940, 15 U.S.C. §§ 80b-5,

80b-6; the Minnesota Uniform Deceptive Trade Practices Act, Minnesota Consumer Fraud Act,

Minnesota False Advertisement Act, and Minnesota Unlawful Trade Practices Act; and for

breach of fiduciary duty and unjust enrichment. The Complaint alleges that Defendants engaged

in a common course of conduct that included, among other things, misrepresentations and

omissions in connection with the (a) marketing and sale of financial plans and advice to

Defendants' clients; (b) the marketing, recommending, and sale of certain non-proprietary

mutual funds that paid inadequately disclosed compensation to Defendants for such promotion;

and (c) the marketing, recommending, and sale of Defendants' proprietary mutual funds and

other proprietary products. For purposes of the Settlement only, the Court makes final its

certification of these claims for class treatment.

5. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court hereby

makes final its appointment of Plaintiffs (Leonard D. Caldwell, Carol M. Anderson, Donald G.

Dobbs, Kathie Kerr, Susan M. Rangeley, and Patrick J. Wollmering) as representatives of the

Class for purposes of the Settlement.

6. Having considered the factors described in Rule 23(g)(1) of the Federal Rules of

Civil Procedure, the Court hereby makes final its appointment of Plaintiffs' counsel, the law

4



firms of Girard Gibbs LLP, Milberg Weiss LLP, and Stull Stull & Brody, as counsel for the

Class for purposes of the Settlement.

In accordance with the Notice Order, individual notice of the pendency of this

Action as a class action and of the proposed Settlement was given to all Class Members who

could be identified with reasonable effort, using the information provided by Defendant AEFA,

supplemented by published notice. The form and method of notifying the Class of the pendency

of the Action as a class action, the terms and conditions of the Settlement, and the Final Fairness

Hearing met the requirements of Rule 23 of the Federal Rules of Civil Procedure;

Section 21D(a)(7) of the Securities Exchange Act of 1934 (as amended by the Private Securities

Litigation Reform Act of 1995), 15 U.S.C. § 78u-4(a)(7); and due process, constituted the best

notice practicable under the circumstances, and constituted due and sufficient notice to all

persons and entities entitled thereto.

8. The Settlement is approved as fair, reasonable, and adequate, and the Parties are

directed to consummate the Settlement in accordance with the terms and provisions of the

Stipulation.

9. The Complaint, which the Court finds was filed on a good-faith basis in

accordance with the Private Securities Litigation Reform Act of 1995, based upon publicly

available information, is hereby dismissed with prejudice and without costs, except as provided

in the Stipulation, as against Defendants.

10. Class Members, and the successors and assigns of any of them, are hereby

permanently barred and enjoined from instituting, commencing, or prosecuting, either directly or

in any other capacity, any and all Released Claims against any and all Released Persons. The

Released Claims are hereby compromised, settled, released, discharged, and dismissed as to all

5



Class Members and their successors and assigns and as against the Released Persons on the

merits and with prejudice by virtue of the proceedings herein and this Order and Final Judgment.

11. Defendants and Nominal Defendants and their successors and assigns are hereby

permanently barred and enjoined from instituting, commencing, or prosecuting, either directly or

in any other capacity, any and all Settled Defendants' Claims against any Plaintiffs, Class

Members, or their attorneys. The Settled Defendants' Claims of all Defendants and Nominal

Defendants are hereby compromised, settled, released, discharged, and dismissed on the merits

and with prejudice by virtue of the proceedings herein and this Order and Final Judgment.

12. The Released Persons are hereby discharged from all claims for indemnity and

contribution by any person or entity, whether arising under state, federal or common law, based

upon, arising out of, relating to or in connection with the Released Claims of the Class or any

Class Member, other than claims for indemnity or contribution asserted by a Released Person

against another Released Person . Accordingly, the Court hereby bars all claims for indemnity

and/or contribution by or against the Released Persons based upon, arising out of, relating to, or

in connection with the Released Claims of the Class or any Class Member; provided, however,

that this bar order does not prevent any Released Person from asserting a claim for indemnity or

contribution against another Released Person.

13. Neither this Order and Final Judgment, nor the Stipulation, nor any of its terms

and provisions, nor any of the negotiations or proceedings connected with it, nor any of the

documents or statements referred to therein shall be:

(a) offered or received against Defendants or Nominal Defendants as

evidence of or construed as or deemed to be evidence of any presumption, concession, or

admission by any Defendant with respect to the truth of any fact alleged by Plaintiffs, the

6



certification of the class, or the validity of any claim that has been or could have been asserted in

the Action or in any litigation, or the deficiency of any defense that has been or could have been

asserted in the Action or in any litigation, or of any liability, negligence, fault, or wrongdoing of

Defendants or Nominal Defendants;

(b) offered or received against Defendants or Nominal Defendants as

evidence of a presumption, concession or admission of any fault, misrepresentation, or omission

with respect to any statement or written document approved or made by any Defendant or

Nominal Defendant;

(c) offered or received against Defendants or Nominal Defendants as

evidence of a presumption, concession or admission with respect to any liability, negligence,

fault or wrongdoing, or in any way referred to for any other reason as against any Defendant or

Nominal Defendant, in any other civil, criminal or administrative action or proceeding, other

than such proceedings as may be necessary to effectuate the provisions of the Stipulation;

provided, however, that Defendants and/or Nominal Defendants may refer to this Order and

Final Judgment and/or the Stipulation to effectuate the liability protection granted them

thereunder;

(d) construed as an admission or concession that the consideration given

under the Stipulation represents the amount which could be or would have been recovered after

dispositive motions or trial; or

(e) construed as or received in evidence as an admission, concession, or

presumption against Plaintiffs or any Class Members that any of their claims are without merit,

or that any defenses asserted by Defendants or Nominal Defendants have any merit, or that

damages recoverable under the Complaint would not have exceeded the Settlement Payment.

7



14. The Plan of Allocation proposed by Plaintiffs' Co-Lead Counsel for allocating the

proceeds of the Settlement is approved as fair, reasonable, and adequate, and the Claims

Administrator is directed to administer the Settlement and allocate the Settlement Fund in

accordance with its terms and provisions.

15. The Court finds that all Parties and their counsel have complied with each

requirement of Rule 11 of the Federal Rules of Civil Procedure as to all proceedings herein.

16. Plaintiffs' Co-Lead Counsel are hereby awarded 27 percent of the Settlement

Fund in attorneys' fees, which sum the Court finds to be fair and reasonable, and $597,204 in

reimbursement of expenses, which fees and expenses shall be paid to Plaintiffs' Co-Lead

Counsel from the Settlement Fund with interest at the same net rate that the Settlement Fund

earns, from the date the Court approves the Fee and Expense Award. Plaintiffs' Co-Lead

!'l---- ,._1 -L-11 -11__.. a_'L....._......7 ., C..«_-__.,.e C__,. ..W_-,_ 'L_W-_1_._,. ..____.7 :-- -'L_:_ ___.-

agreement, and among any other counsel in a fashion that, in the opinion of Plaintiffs' Co-Lead

Counsel, fairly compensates such counsel for their contribution to the prosecution of the Action.

17. In making this award of attorneys' fees and reimbursement of expenses to be paid

from the Settlement Fund, the Court has considered and found that:

(a) The Settlement has created a fund of $100,000,000 in cash that is already

on deposit, plus interest thereon, and that numerous Class Members who file acceptable Proof of

Claim forms will benefit from the Settlement created by Plaintiffs' Co-Lead Counsel;

(b) The Settlement obligates Defendants to pay all reasonable expenses of

notice and settlement administration and to adopt remedial measures negotiated with Plaintiffs'

Co-Lead Counsel and designed to address the issues giving rise to the Action;



(c) Over 3,012,814 copies of the Settlement Notice were disseminated to

putative Class Members indicating that Plaintiffs' Co-Lead Counsel were movJing for, attorneys'

60 ^SA6fees and reimbursement of expenses in the requested amounts, afhd there were

N4ritten

comments and objections in opposition to the proposed Settlement and/or the fees and expenses

requested by Plaintiffs' Co-Lead Counsel which have been considered by the Court and the

Court overrules;

(d) Plaintiffs' Co-Lead Counsel have conducted the litigation and achieved

the Settlement with skill, perseverance, and diligent advocacy;

(e) The Action involves complex factual and legal issues and, in the absence

of a settlement, would involve further lengthy proceedings with uncertain resolution of such

issues;

(f) Had Plaintiffs' Co-Lead Counsel not achieved the Settlement, there would

remain a significant risk that the Class would recover significantly less or nothing from

Defendants and/or Nominal Defendants;

(g) Plaintiffs' Co-Lead Counsel have submitted affidavits showing that they

expended over 24 , 000 hours , with a lodestar value of $9,572, 865, in prosecuting the Action and

achieving the Settlement; and

(h) The amounts of attorneys' fees awarded and expenses reimbursed from the

Settlement Fund are consistent with awards in similar cases.

18. Plaintiffs' Co-Lead Counsel are authorized to pay, from the amount awarded by

the Court for attorneys' fees, incentive awards of $5,000 each to each of the six class

representatives in this action and each of the five plaintiffs in the related Haritos case.

9



19. Exclusive jurisdiction is hereby retained over the Parties and the Class Members

for all matters relating to this Action and the Settlement, including (a) the administration,

interpretation, effectuation, or enforcement of the Stipulation and this Order and Final Judgment;

(b) any application for fees and expenses incurred in connection with administering and

distributing the Settlement proceeds to the Class Members; (c) any dispute over attorneys' fees

or expenses sought in connection with the Action or the Settlement; and (d) determination

whether, in the event an appeal is taken from any aspect of the Judgment approving the

Settlement or any award of attorneys ' fees, notice should be given under Federal Rule of Civil

Procedure 23(d), at the appellant's expense, to some or all members of the Class apprising them

of the pendency of the appeal and such other matters as the Court may order.

20. Without further order of the Court, the Parties may agree to reasonable extensions

of time to carry out any of the provisions of the Stipulation.

Z I tJ &Z.a-

DATED:HONORABLE DEBORAH A. BATTS

UNITED STATES DISTRICT JUDGE

10


Exhibit 11








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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ... · 9/22/2014 · in the united states...

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