The securities class action In re Citigroup, Inc. Bond Action Litigation has settled for $730 million, much to the ridicule of Dealbreaker, which notes that the bondholders were already bailed out by taxpayers, and that the settlement bails them out a second time by shareholders—which include taxpayers once again.
But that's just arguably a flaw of the PSLRA; if there was securities fraud, a bailout is largely irrelevant to whether there's a legal cause of action.
Dealbreaker misses the most offensive aspect of the settlement, which is that Bernstein Litowitz plans to ask for $146 million in fees, when it's legally entitled to at most in the $70 million range for a settlement of this size, and perhaps even less depending on the conduct of the litigation. We can tell what a bad job lead plaintiff Louisiana Sheriffs' Pension and Relief Fund is doing controlling their attorneys, because Bernstein Litowitz is asking for "only" $150 million in the $2.43 billion Bank of America settlement—suggesting that Bernstein thinks attorneys are entitled to 0.2% for amounts won over $730 million. If the related Citigroup Securities litigation is any indication, that eventual $146 million fee request is hiding tens of millions of dollars of overbilling. And that's what my shoestring three-lawyer shop discovered while maintaining a big docket of other cases. Imagine how much more a better-funded law firm operating on a contingency-fee basis and willing to invest in a larger investigation could dig up.
Somewhere out there there's a pension fund or hedge fund or mutual fund that is a class member in this lawsuit. They are doing their investors a huge disservice if they don't hire contingency-fee attorneys to intervene early to challenge this abusive fee request.