A recent BLT blog post, “Judge Approves $153 Million Settlement in Fannie Mae Securities Class Action,” reports that a Washington federal trial judge today approved a $153 million settlement between Fannie Mae and shareholders who sued the mortgage giant for securities fraud. U.S. District Judge Richard Leon found the settlement and plan for distributing it among the more than one million class members was “fair, reasonable and adequate.” The case is the largest securities class action settlement in the D.C. federal courts since modern securities litigation law went into effect in 1996.
Under the terms of the settlement, plaintiff lawyers will receive 22 percent of the settlement fund in attorney fees—approximately $29.1 million, after certain costs and expenses were subtracted-plus an additional $15 million in expense reimbursements. Markovits, Stock & DeMarco in Cinncinnati served as lead class counsel, along with Bernstein Liebhard and Cohen Millstein Sellers & Toll.
This ends nearly a decade of litigation against Fannie Mae and its auditor, KPMG LLP. The class members led by the Ohio Public Employees Retirement System and the State Teachers Retirement System of Ohio, accused Fannie Mae and KPMG of defrauding shareholders by manipulating earning and violating guidelines known as generally accepted principles.
The 22 percent award of attorney fees, Leon said, was appropriate. “In the Court’s view…the lawyering in this case has been, by any standard, exceptional,” he wrote. “Plaintiffs’ counsel wrestled with highly complex accounting issues and Fannie Mae’s placement into conservatorship, as well as initiated a parallel proceeding challenging an FHFA rule that compounded their risks by potentially cutting off any recovery even in the event they succeeded at trial—all while facing off against skilled defense lawyers,” he wrote. “In the Court’s view, this case was extraordinary in many respects and merits a substantial fee award.”
For more on this case, visit http://www.fanniemaesecuritieslitigation.com/