July 03, 2018
In the wake of the special master’s report on the $300 million State Street securities class action, last week lead class counsel Labaton Sucharow asked the special master in charge of investigating potentially misleading attorney fee distributions to recuse himself, Legal Newsline reports.
Class counsel strongly contest the findings of the report, which was compiled by former U.S. District Judge Gerald Rosen and calls for $10.6 million of $75 million in attorneys’ fees to be returned. The report details instances of double-billing and significant disclosure omissions from the plaintiffs’ firms involved in the case, including an undisclosed $4.1 million finder’s fee paid by Labaton to an intermediary between the firm and the lead plaintiff.
Beyond the report itself, class counsel also object to the judge handling the case: Following a heated sidebar conversation in which U.S. District Judge Mark Wolf questioned whether the finder’s fee really “stopped with Mr. Chargois [the intermediary],” Labaton moved to have the judge recuse himself. Judge Wolf responded on Thursday, refusing to recuse himself and saying that doing so might “encourage the perception that litigants can manipulate the system to veto an unwanted judge.”