US judge approves legal fees in antitrust settlement against major banks

A US district judge has approved US$102 million in legal fees for law firms Quinn Emanuel Urquhart & Sullivan and Cohen Milstein Sellers & Toll for their work on a US$580 million settlement in an antitrust lawsuit against major banks.

According to Reuters, the case began in 2017 and accused the banks of conspiring to limit competition in the stock lending market, a sector worth trillions of dollars.

In her ruling, Judge Katherine Polk Failla of the US District Court in New York deemed the legal fee award "fair and reasonable," representing 17.06 percent of the settlement funds. The case involved institutional investors who alleged that banks, including Goldman Sachs, JPMorgan, Morgan Stanley, UBS, and Credit Suisse, had worked together to prevent modernization in the stock lending market by boycotting new entrants. The plaintiffs claimed they had been overcharged for stock lending, a process where investors temporarily transfer stocks to one another.

The five banks involved agreed to pay a combined US$580 million to settle the lawsuit, while Bank of America remains the only defendant that has not settled. All of the banks, including Bank of America, deny any wrongdoing.

The law firms representing the class plaintiffs reported to the court in May that they had worked more than 180,000 hours over six years without compensation. Their efforts included conducting 100 depositions and reviewing over half a billion pages of documents. The settlement also requires antitrust compliance reforms for EquiLend, a stock lending platform created as a joint venture among the banks. According to settlement documents, the class attorneys estimate the value of these industry reforms at US$319 million.

Judge Failla stated in her order that the US$102 million legal fee award is "appropriate to the specific circumstances of this action" and aligns with compensation awarded in similar large-scale antitrust cases.