|  | | 2010 News and Press Releases | | |
SETTLEMENT NEWS:
$56 Million Fee Approved in Class Action Over Backdating
Nate Raymond
New York Law Journal. June 25, 2010
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EXCERPT: A federal judge in Brooklyn has approved a $56 million fee for Pomerantz Haudek Grossman & Gross for its work as lead counsel in a class action over alleged backdating against Comverse Technology Inc. Eastern District of New York Judge Nicholas Garaufis on Thursday approved a fee of 25 percent of a $225 million settlement, which the judge also signed off on in In re Comverse Technology Inc. Securities Litigation (pdf), 06-CV-1825. A state retirement fund in Pennsylvania had objected to the fees as too large (pdf), but the judge said he was unwilling to interfere with an award negotiated openly between the law firm and its client, lead plaintiff Menora Group. Marc Gross, a name partner at Pomerantz Haudek, based in New York, said the fee award "is the largest in our 75-year history." The firm stood at one time to earn up to 30 percent, but ultimately cut its fee after Menora Group "pressed us to take some reduction," he said. "Ultimately the 25 percent that was agreed upon was well within the normative range of these types of lawsuits," Gross said. Comverse in December agreed to the $225 million settlement, the second-largest in a case involving backdating. A number of companies including Comverse came under scrutiny for allegedly issuing options with dates earlier than when they were actually granted. Comverse's former CEO, Jacob "Kobi" Alexander, fled to Namibia after the federal government charged him and the company's chief financial officer and general counsel in 2006 with criminal fraud. Comverse will pay $165 million of the settlement. Alexander, still abroad, agreed to pay $60 million. Joseph S. Allerhand, a lawyer for Comverse at Weil, Gotshal & Manges, declined to comment. Edward M. Spiro, a lawyer for Mr. Alexander at Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, had no comment. |
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