Northern District of Texas
In one of the earliest cases filed after the enactment of the Private Securities Litigation Reform Act (“PSLRA”), a large public pension fund was designated lead plaintiff and G&E was appointed lead counsel in an opinion that is widely considered the landmark on standards applicable to the lead plaintiff/lead counsel practice under the PSLRA. (See, especially, In re Cendant Corp. Litigation, 2001 WL 980469, at *40, *43 (3d Cir. Aug. 28, 2001), citing CellStar.) After the CellStar defendants’ motion to dismiss failed and a round of discovery was completed, the parties negotiated a $14.6 million settlement, coupled with undertakings on CellStar’s part for significant corporate governance changes. With the plaintiff’s active lead in the case, the class recovery, gross before fees and expenses, was approximated to be 56% of the class’s actual loss claims, about 4 times the historical 14% average gross recovery in securities fraud litigation. Because of the competitive process that the lead plaintiff undertook in the selection of counsel, resulting in a contingent fee percentage significantly less than the average 31% seen historically, the net recovery to the class after all claims were submitted came to almost 50% of actual losses, or almost 5 times the average net recovery.