In re Apple Inc Securities Litigation

Lawsuit involves fraudulent practices by Apple executives and directors, who backdated grants of stock options to themselves and other Apple employees.  By hiding these grants from shareholders, Apple executives were able to enrich themselves.  Once this practice of backdating came to light, Apple stock plunged, causing massive losses to shareholders.

1. Final Approval granted.
2. Since the settlement agreement was amended to direct an additional $2.5 million to the class instead of cy pres recipients, the Court found the request for fees by Objector Pezzati and his attorneys (the Center for Class Action Fairness) to be appropriate but reduced those fees from $297,916 to $87,000, plus a $1,000 award to Objector Pezzati himself.
3. Objector Pezzati waived his right to appeal in exchange for the award of fees.

1. Notice was not sent to class members in a timely fashion.
   • Class members do not have time to review the attorneys' fee motion.
   • Class members do not have time to opt out or object.

NOTE:  After the claims period was extended, Objector Sibley withdrew his objection.

1. Settlement improperly sets funds aside for cy pres recipients, without making class members whole.
   • Structuring the settlement this way violates class counsel's fiduciary obligation to the class.
2. Value of the settlement fund may be illusory.
3. Attorneys' fees should be tied to the recovery of the class.

NOTE:  After the claims information was made available, it became clear that the fund would be exhausted by class members and no money would be diverted to cy pres recipients.  Objector Pezzati dropped this portion of his objection, while still maintaining that it was improper for the settlement to have been structured this way.

NOTE:  Claiming a $2.5 million improvement in the value of the settlement to the class, Objector Pezzati motioned for attorneys' fees for his Center for Class Action Fairness counsel of $297,916, plus an objector incentive award of $1,000, to be paid out of class counsel's fee award.  The Court found the CCAF's claims to have expended 104 hours on the case to be dubious (Final Approval Order, page 8) but did find that their improvement to the settlement warranted an award of fees.  The Court found that $87,000, plus a $1,000 objector incentive award, to be paid by the Defendant, would be appropriate.  In exchange for this award of fees, Objector Pezzati waived his right to appeal the Final Approval (Final Approval Order, page 8).