

Uncovering Hidden Conflicts in Stockholder Class Action Litigation
Stockholder representatives in class and derivative actions are supposed to share in any recovery on the same terms as other stockholders.[1] Absent court approval, class counsel typically cannot share fee awards with their clients.[2] Indeed, class-action litigator William Lerach famously served time in federal prison after pleading guilty to a conspiracy charge related to the payment of kickbacks to class plaintiffs.[3]
Direct payments between class counsel and their clients are the most obvious means of encouraging plaintiffs to bring cases, but there are others. For instance, in a recent federal securities class action involving State Street Bank … Read more