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From Antitrust Law Daily, July 8, 2015

$20M in attorney fees awarded in platinum, palladium price fixing suit

By Greg Hammond, J.D.

In an action against several financial services companies for conspiring to manipulate platinum and palladium prices, attorneys representing purchasers and sellers of platinum and palladium contracts in the futures and physical markets have been awarded fees of over $20 million, collectively, by the federal district court in New York City (In re Platinum and Palladium Commodities Litigation, July 7, 2015, Pauley, W.).

The purchasers and sellers brought claims for violations of the Sherman Act, the Commodity Exchange Act, and the Racketeer Influenced and Corrupt Organizations Act, and common law claims for negligence and fraud, arising out of MF Global’s, Moore Capital Management’s, and other financial services companies’ “bang the close” transactions at the end of trading days, which allegedly inflated prices in the futures and physical markets for platinum and palladium.

In February 2015, the court granted final approval to a settlement fund for the futures class of $42.5 million and a $21.1 million settlement fund for the physical class.

Futures class counsel sought an attorney fee award of approximately $21.4 million, representing 29.5 percent of the futures class common fund, along with an expense reimbursement of $704,294. Physical class counsel sought attorney fees of $4,029,300, representing 33.3 percent of the physical class common fund, and an expense reimbursement of $229,230.

In considering the Goldberg factors, the court determined: (1) there is no question that futures and physical class counsel faced significant risks in the complex multi-year litigation, because claims for manipulations in violation of the Commodity Exchange Act are notoriously difficult to prove and more difficult and risky than securities fraud cases; (2) futures class counsel expended approximately 13,300 hours of professional time and physical class counsel expended approximately 5,260 hours of professional time; and (3) public policy and the high quality of representation favor an award of attorney fees.

The court next conducted a lodestar cross-check to test the reasonableness of the percentage-based fees. With regard to physical class counsel, the court found a total lodestar of $2,935,823, representing a multiplier of approximately 1.4. This fell well within the range approved by district courts and confirmed the reasonableness of physical class counsel’s requested award.

The total lodestar for futures class counsel was $8,249,144, yielding a multiplier of 2.6. Although the attorney rates and amount of time spent on the case were reasonable, the court found that futures class counsel’s allocation of time was heavily weighted towards partners and that less than one percent of the billable hours represented associates’ time. The court determined that a reduction in the percentage of the common fund awarded to futures class counsel was warranted, particularly in light of the large percentage of hours attributable to attorneys with the highest billing rates and the relatively early stage of the litigation in which settlement was achieved. Futures class counsel was therefore awarded 22.5 percent of the common fund—or $16,312,500—representing a multiplier of approximately 1.9.

Finally, the court awarded class counsels’ motion for reimbursement of expenses, finding that the expenses incurred were reasonable given the magnitude and scope of the case, as well as the extensive use of experts.

The case is No. 1:10-cv-03617-WHP.

Attorneys: Christopher Lovell (Lovell Stewart Halebian Jacobson LLP), Vincent Briganti (Lowey Dannenberg Cohen & Hart, P.C.), and Edward Cochran (Law Offices of Edward Cochran) for the futures class plaintiffs. William J. Doyle (Doyle Lowther LLP) for the physical markets plaintiffs. David Mitchell Zensky (Akin Gump Strauss Hauer & Feld) for Moore Capital Management, LP, Moore Capital Advisors, LLC, Moore Advisors, Ltd., and Moore Capital Management, LLC.

Companies: Moore Capital Management, LP; Moore Capital Advisors, LLC; Moore Advisors, Ltd.; Moore Capital Management, LLC

MainStory: TopStory Antitrust NewYorkNews

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