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October 11, 2018

Labaton Firm To Refund “Dubious” Finders’ Fee

The Labaton Sucharow law firm will pay back $4.8 million in fees it collected in a proposed settlement stemming from the now-infamous $300 million State Street lawsuit for the “dubious” finders’ fee it paid to a lawyer who did no legal work on the case, the New York Times reports.

In addition to sending that money to plaintiffs and some of the other firms involved, Labaton also agreed to retain a former federal judge to ensure any fee-sharing arrangements “are in compliance with applicable rules and emerging best practices.” John Coffee Jr., a Columbia Law School securities law professor, called the finders’ fee “under the table and dubious” and encouraged more judges to be aggressive in asking firms to disclose such arrangements at the outset of litigation, rather than at the end.

Coffee said the lawsuit uncovered a “rather sordid market of buying and selling plaintiffs” in securities litigation.

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