A recent Law 360 story by Rachel Graf, “Attys in $35M Facebook Deal Seek $14M in Fees, Costs,” reports that attorneys asked a New York federal court for almost $14 million in fees and costs for negotiating a $35 million settlement with Facebook Inc. to resolve a consolidated securities class action alleging the social media company misrepresented revenue projections ahead of its 2012 initial public offering. 

Lead counsel Bernstein Litowitz Berger & Grossmanm LLP and Labaton Sucharow LLP are seeking 25 percent of the total settlement in attorneys’ fees for all plaintiffs’ counsel, as well as about $5 million in litigation expenses.  The fees were contingent on the outcome of the litigation, and the proposed amount is less than what has been granted in similar class actions, the attorneys said.

“The recovery obtained for the class was achieved despite very significant risks of no recovery and through the skill, experience, and effective advocacy of lead counsel,” the filing said.

Early Facebook investors brought the allegations more than five years ago, claiming the company downplayed the weight mobile usage would have on revenue.  Facebook knew that mobile usage was hurting its advertising business, but it told regulators before its IPO only that its revenue “may” be affected by it, the investors claimed.

Shortly after Facebook began publicly trading on May 18, 2012, Facebook’s revenue concerns were reported and share prices fell more than 18 percent during the next two trading days, the complaint said   Investors filed the complaint against Facebook, its executives and investment banks that served as underwriters for the IPO.  The court preliminary approved a $35 million settlement resolving the allegations in February.  The settlement class includes institutional and retail investors who bought shares of Facebook between May 17, 2012, and May 21, 2012.

The investors’ attorneys are also seeking almost $57,000 total for the class representatives.  The attorneys said their requests are reasonable given the time and effort that went into the litigation.  “After more than five years of hard-fought litigation, involving the completion of fact and expert discovery (including conducting more than 40 fact and expert depositions), certification of a litigation class, appellate practice, opposing defendants’ four motions for summary judgment, and trial preparation through just eight weeks before trial, lead counsel have negotiated a favorable settlement of this class action with defendants,” the filing said.

The case is In re: Facebook Inc. IPO Securities and Derivative Litigation, case number 1:12-md-02389, in U.S. District Court for the Southern District of New York.