Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  



In re Citigroup, Inc. Bond Action Litigation

| No Comments

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.

Leave a comment

Once submitted, the comment will first be reviewed by our editors and is not guaranteed to be published. Point of Law editors reserve the right to edit, delete, move, or mark as spam any and all comments. They also have the right to block access to any one or group from commenting or from the entire blog. A comment which does not add to the conversation, runs of on an inappropriate tangent, or kills the conversation may be edited, moved, or deleted.

The views and opinions of those providing comments are those of the author of the comment alone, and even if allowed onto the site do not reflect the opinions of Point of Law bloggers or the Manhattan Institute for Policy Research or any employee thereof. Comments submitted to Point of Law are the sole responsibility of their authors, and the author will take full responsibility for the comment, including any asserted liability for defamation or any other cause of action, and neither the Manhattan Institute nor its insurance carriers will assume responsibility for the comment merely because the Institute has provided the forum for its posting.

Related Entries:



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.