Lawyers in Wells Fargo case ask for $180 million in attorney fees

Aug 7 (Reuters) – A group of U.S. lawyers whose securities fraud lawsuit against Wells Fargo & Co (WFC.N) led to a $1 billion class-action settlement in May said they are seeking $180 million in fees.

Attorneys from the firms Cohen Milstein Sellers & Toll and Bernstein Litowitz Berger & Grossmann spearheaded claims that Wells Fargo misled shareholders about its progress in recovering from a series of scandals over its treatment of customers.

U.S. District Judge Gregory Woods in Manhattan federal court granted preliminary approval to the all-cash settlement in May, with a Sept. 8 hearing scheduled.

Lawyers for the plaintiffs were able to seek up to 19% of the settlement for legal fees under the terms of the agreement. On Friday, the lawyers asked the judge to approve 18%, as well as another $1.2 million for costs and expenses, arguing the award is “fair and reasonable.”

Plaintiffs’ co-lead counsel Laura Posner of Cohen Milstein and John Browne of Bernstein Litowitz did not immediately respond to a request for comment. A Wells Fargo spokesman declined to comment.

Since 2018, Wells Fargo has operated under consent orders from the Federal Reserve and two other financial regulators requiring it to improve governance and oversight.

It is also under an asset cap by the Fed, limiting its growth and its ability to compete with larger rivals JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N) and Citigroup Inc (C.N).

Shareholders accused Wells Fargo, the fourth-largest U.S. bank, of overstating how well it was complying with those orders, and said the bank’s market value fell by more than $54 billion over two years ending in March 2020 as the shortcomings became known.

The San Francisco-based bank denied wrongdoing and said in court papers that it settled to eliminate the burden and cost of litigation. In their fee request, the plaintiffs’ lawyers cited Wells Fargo’s “experienced and able counsel” from a swath of firms, including Sullivan & Cromwell; Cravath, Swaine & Moore; and Shearman & Sterling.

“In the face of this skillful opposition, lead counsel, nonetheless, successfully litigated the claims and negotiated with defendants to settle the case on terms that are extremely favorable to the settlement class,” Posner and Browne wrote in a Friday filing.

The case is In re Wells Fargo & Co Securities Litigation, U.S. District Court, Southern District of New York, No. 20-04494.

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