Florida State Board of Administration, Tallahassee, today placed a $50 million cap on all contingency fees for law firms in any securities litigation case.
The cap is designed to make sure taxpayers and FSBA participants get the biggest share of what’s recovered in litigation, Bill McCollum, state attorney general and a board trustee, said today at a board meeting that was webcast.
The board, which oversees $136 billion, also approved having law firms in its securities litigation pool compete for cases based on how they will handle the case and on their proposed fee.
The law firms in its pool are Pomerantz Haudek Grossman & Gross; Bernstein Litowitz Berger & Grossmann; Berman DeValerio; Barrack Rodos & Bacine; and Kaplan Fox & Kilsheimer.
“It’s extremely rare to set an absolute cap,” said Adam Savett, director of securities class action services of RiskMetrics Group, which wasn’t involved in the Florida matter. Caps based on a percentage of the recovery are more typical, he added.
Florida hasn’t been an active securities litigant. The most recent active securities litigation FSBA filed was in 2005, against American International Group, over alleged financial misstatement, a case still pending, said Dennis D. MacKee, communications director of the FSBA. Berman DeValerio is representing FSBA in the case.