Objections To Report Recently Filed, Although Special Master Disturbed About What He Found.
A plaintiff class action in Arkansas Teachers Retirement System v. State Street Bank, No. 11-cv-10230 MLW et al. (D. Mass.) accused State Street of overcharging customers in certain foreign exchange transactions. A $300 million settlement was reached, and U.S. District Judge Mark Wolf awarded $75 million in fees principally to three class counsel in November 2016. However, based on some public investigative reports, he appointed retired federal Judge Gerald Rosen as a special master to examine the awarded fees and report back to him with recommendations—with the three firms having to pay the costs of the special master’s investigation.
Although initially sealed, that report was unsealed to the public on June 28, 2018 after the special master had billed around $3.8 million for his work. The 377-page report, characterized as “scathing” by at least one large Boston newspaper, concluded that the three firms should return $10.6 million of the awarded fees. He especially was critical of a $4.1 million “referral fee” to one Texas lawyer never appearing in the case and performing no work in the matter. He found “very serious questions of class action law, ethical obligations owed both among counsel and to the court, and fundamental concerns about how courts should be assisted by (plaintiffs’ lawyers) in fulfilling their fiduciary obligations to the class.”
The firms filed objections on June 28, 2018 after some tried to keep the report sealed, with District Judge Wolf yet to make a ruling on the special master’s findings/recommendations. The law firms adamantly disagreed with the special master’s findings and conclusions.