Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 1 of 41

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1 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 1 of 41 SECURITIES AND EXCHANGE COMMISSION UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA MIAMI DIVISION CASE NO.: CIV-MOORE Case No CIV-MOORE/GARBER vs. Plaintiff, PENSION FUND OF AMERICA, L.C., PFA ASSURANCE GROUP, LTD., PFA INTERNATIONAL, LTD., CLAREN TPA, LLC, LUIS M. CORNIDE and ROBERT DE LA RIVA, Defendants. MARCELLA CORDOVA, JORGE FLORES, HENRY IURMAN, MARCOS MUSTIELES, And KATIA OCAMPO, individually and on behalf of all others Case No CIV-MOORE-GARBER similarly situated, vs. Plaintiffs, LEHMAN BROTHERS, INC., a New York Corporation; MERRILL LYNCH & CO., INC., a Delaware Corporation; RAYMOND JAMES FINANCIAL SERVICES, INC., a Florida Corporation; OLIVA INVESTMENT GROUP, INC., a Florida Corporation; SUNTRUST BANKS, INC., a Georgia Corporation, and HSBC BANK, U.S.A., LUIS CORNIDE and ROBERT A. DE LA RIVA, Defendants. RECEIVER'S AND LEAD PLAINTIFFS' MOTION FOR FINAL APPROVAL OF SETTLEMENTS AND PLAINTIFFS' MOTION FOR ATTORNEYS' FEES AND INCORPORATED MEMORANDUM OF LAW

2 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 2 of INTRODUCTION After more than three years of litigation and the expenditure of immense effort, including the filing of an original and two amended complaints, responding to numerous motions to dismiss those complaints, the filing of motions for lead plaintiff status and for certification of a class, extensive third-party investigation and review of over ten thousand documents, and, remarkably, in some cases, after dismissal of Plaintiffs' claims with prejudice, Plaintiffs' counsel and the Receiver have negotiated very favorable settlements on behalf of the proposed Class with the following Defendants and non-parties: (1) Ocean Bank ("OB"); (2) Rasco, Reininger, Perez, Esquenazi & Vigil, P.L. ("RRPEV"); (3) Bermudez, Tome & Haralson LLP and Paul Haralson, Esq., and their insurer, Medmarc Casualty Insurance Company (collectively, "Haralson"); (4) Lehman Brothers ("LB"); and (5) Raymond James Financial Services ("RJFS") and Olivia Investment Group ("OIG") (collectively, "RJFS/OIG") (OB, RRPEV, Haralson, LB, and RJFS/OIG are collectively referred to herein as "Settling Parties"). Collectively, the Settling Parties will pay $2,055,000 in cash to Plaintiffs and the Class. The net proceeds of these settlements, after the allowance by this Court of fees and costs to counsel for Plaintiffs (the "Net Settlement Fund"), will be distributed pro rata to Settlement Class Members to the extent of their allowed claims in the Receivership Case, without the necessity of filing additional proofs of claim, which will insure expeditious distribution. As a result, the Receiver will have the Net Settlement Fund available for prompt distribution to the Class, in addition to the more than $31 million already distributed pursuant to previous settlements. These settlements are all excellent results, particularly considering that litigation of some of the claims being settled would require appellate reversal of this Court's dismissal order and that claims against the Settling Parties that have not yet been sued would likely face significant legal and procedural hurdles. These 2

3 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 3 of 41 settlements will give the Class additional immediate and substantial relief, in a case whose procedural posture made it unlikely that the Class would receive any further relief. The Receiver and Plaintiffs now move for final approval of the settlements with the Settling Parties. Because the previously-filed Motion of Receiver and Lead Plaintiffs for Preliminary Approval of Settlement and Memorandum of Law ("Motion for Preliminary Approval") (DE. 373) is quite detailed, we will not set forth its contents again here. Instead, we will highlight what we consider to be the most significant provisions of the settlements, and incorporate our Motion for Preliminary Approval by reference. As part of this motion, Plaintiffs' counsel seek an award of attorneys' fees and reimbursement of expenses to compensate us for our work. As explained below, this request takes account of the substantial legal and structural hurdles faced by counsel, the extensive work done to achieve these settlements and to advance and represent the Class's interests to date, the results achieved, and the fact that a failure to prevail in this matter would result in no fees whatsoever, despite counsel's expenditure of millions of dollars in time and expenses. II. MOTION FOR FINAL APPROVAL A. BACKGROUND 1. The Nature of the Case From 1999 through 2005, Pension Fund of America ("PFA") and defendants HSBC, Merrill Lynch, Suntrust, Raymond James, Lehman Brothers and Oliva Investment Group ("Financial Institution Defendants") jointly offered several trust plans, including the Liberty Trust, which was a monthly or annual contribution plan, and the Capital Trust, a one-time contribution plan. Approximately 85% of all investors chose the Liberty Trust, which required regular contributions of between $1,000 and $20,000 for ten to fifteen years, and imposed 3

4 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 4 of 41 significant early withdrawal penalties - for example, 100% for withdrawals during the first two years, declining thereafter for the term of the plan. The Capital Trust was a ten-year plan that required a minimum one-time contribution of $10,000. Cmp The investment component of both plans purported to offer investors the option of directing the investment of their funds into mutual funds offered by well-known U.S. fund companies, such as Fidelity, Legg Mason, Janus and Goldman Sachs. The solicitation and promotional materials offered Plaintiffs and the Class an investment in mutual funds combined with a term life insurance component, secured by a trust relationship with the Financial Institution Defendants, promising investors a secure return on their investments. Cmp.122. Defendants' participation was critical to the marketing of the PFA trust plans because their names and promises supplied legitimacy and the appearance of security to the investments. Cmp. 23. Absent the illusion of safety and security provided by the Financial Institution Defendants, the PFA trust plans could never have been successfully marketed. See Cmp , 173(3). An integral part of PFA's business plan was to induce Plaintiffs' investment by highlighting the trustee/custodial role to be played by the Financial Institution Defendants. To this end, PFA's original business plan stated that in order "to boost sales" PFA would "enter into agreements with large multi-national banks with strong recognition in Latin America." With drafting oversight and review from the Financial Institution Defendants, PFA's marketing and promotional materials, and the PFA investment contract, referred to Defendants SunTrust, Merrill Lynch, Lehman Brothers, Raymond James and HSBC as "trustees," "trustee banks," "custodial banks," or "fiduciary banks." As stated by PFA's President, Cornide, in a letter dated 1 References to the Third Amended Complaint will be cited as "Cmp. _." 4

5 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 5 of 41 June 17, 2003, PFA's business model was shared with these Financial Institution Defendants from the very beginning of PFA's operations. Cmp. IT 23, 25. The Financial Institution Defendants failed to disclose to Plaintiffs and members of the Class that PFA's insiders were siphoning as much as 90 percent, and sometimes 100 percent, of investor funds for non-investment purposes. For example, PFA's principals, Cornide and de la Riva, used investors' funds to pay themselves exorbitant salaries and bonuses, and buy millions of dollars of real estate in Coral Gables and the Florida Keys. From 1999 to March 28, 2005, unbeknownst to investors, Cornide and de la Riva received payments from PFA totaling $15 million - 35% of the $43 million in revenue the companies reported for the same period. Cmp. 37. Investors were sent fraudulent account statements with the Financial Institution Defendants' names on them, which statements misrepresented the status and balance of investor retirement trust accounts. While annual statements indicated an investor's "final balance" or "total contribution," these figures in fact reflected only the total initial investment, failing to disclose the significant amounts (up to actually used to purchase mutual funds. 100%) diverted by PFA and the much lower amounts Thus, the annual statements and certificates delivered to investors were misleading in that they vastly overstated the actual amount of investor holdings. Cmp History of the Litigation On March 28, 2005, the Securities and Exchange Commission ("SEC") filed a complaint against PFA, its related entities and principals, SEC v. PFA, CIV-Moore, alleging that they collectively were engaged in offering fraud. Among the proceedings in that action, which resulted in the appointment of the Receiver, was a motion by the Receiver seeking to compel 5

6 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 6 of 41 HSBC to turn over to him roughly $12.8 million in the PFA Master Trust Account and Brokerage Account at HSBC, in which counsel for Plaintiffs played an essential part. On September 8, 2006, Magistrate Judge Garber issued a Report and Recommendation ("R&R") recommending that these funds be turned over to the Receiver. HSBC and Special Counsel appointed to represent the interests of certain PFA investors objected to the R&R.2 On April 21, 2005, a complaint was filed by Class Plaintiffs in the instant action on behalf of a putative class of PFA investors. On June 22, 2005, Class Plaintiffs filed a First Amended Complaint, consolidating the class claims. On February 13, 2006, Class Plaintiffs filed a Second Amended Class Action Complaint, alleging that the Financial Institution Defendants violated federal securities laws by engaging with PFA in a scheme to defraud investors. Plaintiffs briefed extensively against motions to dismiss filed at different times by various Defendants, the final round of which occurred on March 23, (DE. 217, 218, 220, 221, 226). Plaintiffs also extensively briefed class certification (DE. 303) in response to this Court's order requiring such briefing under a five-day deadline (DE. 301). On October 30, 2007, Plaintiffs' counsel argued at length against dismissal of the second amended class action complaint, but the Court granted dismissal, with prejudice, to all remaining Defendants. (DE. 356). Finally, Plaintiffs' counsel appealed this order as to Suntrust and briefed the appeal, resulting in leverage that is at least partially responsible for achieving settlement with the Settling Parties who had not yet been sued but faced potential litigation that would be strengthened by reversal of the dismissal order. 2 These objections were resolved by the previous HSBC settlement. 6

7 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 7 of The Settlement Process Consistent with the terms of the Case Management Order, the Receiver, his counsel, Class Counsel, and counsel for IPM have met and communicated on a regular basis to exchange information regarding current and potential litigation targets, and other important issues of common interest in the receivership case and this case. Additionally, the Receiver and Class Counsel have conducted numerous interviews and depositions and examined voluminous documents to identify potential litigation targets and to gather evidence against them. This has enabled the Receiver and Class Counsel to cooperate not only in the identification of litigation targets but also in the negotiation of settlements with certain of these targets, including the entities that are the subject of these settlements. On January 14, 2008 after extensive negotiations, and more than a month after this Court dismissed Plaintiffs' claims, the Receiver, Class Counsel and OB reached and executed a settlement agreement ("OB Agreement") resolving all issues relating to OB's relationship with PFA. Under this agreement, OB, which had not yet been sued, but which had been identified as a litigation target through the efforts of the Receiver and Class Counsel, will pay $1,000,000 to the Settlement Fund. On January 23, 2008 after extensive negotiations, and more than a month after this Court dismissed Plaintiffs' claims, the Receiver, Class Counsel and RRPEV reached and executed a settlement agreement ("RRPEV Agreement") resolving all issues relating to RRPEV's relationship with PFA. Under this agreement, RRPEV, which had not yet been sued, but which had been identified as a litigation target through the efforts of the Receiver and Class Counsel, will pay $700,000 to the Settlement Fund. 7

8 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 8 of 41 On December 6, 2007 after extensive negotiations, the Receiver, Class Counsel, and Haralson reached and executed a settlement agreement ("Haralson Agreement") resolving all issues relating to Haralson's relationship with PFA. Under this agreement, Haralson, which had not yet been sued, but which had been identified as a litigation target through the efforts of the Receiver and Class Counsel, will pay $235,000 to the Settlement Fund. On May 22, 2008, after extensive negotiations, and more than five months after this Court dismissed Plaintiffs' claims, the Receiver, Class Counsel and LB reached and executed a settlement agreement ("LB Agreement") resolving all issues relating to LB's relationship with PFA. Under this agreement, LB, which had not yet been sued, but which had been identified as a litigation target through the efforts of the Receiver and Class Counsel, will pay $100,000 to the Settlement Fund. On May 5, 2008 after extensive negotiations, the Receiver, Class Counsel, and RJFS/OIG reached and executed a settlement agreement ("RJFS/OIG Agreement") resolving all issues relating to RJFS/OIG's relationship with PFA. Under this agreement, RJFS/OIG, which had not yet been sued, but which had been identified as a litigation target through the efforts of the Receiver and Class Counsel, will pay $20,000 to the Settlement Fund. 4. The Settlement and Proposed Plan of Distribution The settlements with Ocean Bank, Rasco Renninger, Haralson, Lehman Brothers, and Raymond James are excellent results, particularly considering the procedural posture of the case. The settlement stipulations and agreements of settlement (attached as exhibits to motion for preliminary approval, DE. 373) define in great detail the terms of the settlements. As a result of the settlements, a total of $2,055,000 will be paid into the Settlement Fund. The Net Settlement 8

9 Case 1 :05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 9 of 41 Fund will be transferred to the Receiver for distribution to Settlement Class Members3 holding allowed claims in the Receivership Case who did not elect to exclude themselves from the settlements. The Receiver will distribute the Net Settlement Fund pro-rata to Settlement Class Members to the extent of their allowed claims in the Receivership Case, as set forth in detail in the motion for preliminary approval. (DE. 373, pp ).4 B. THE SETTLEMENTS SHOULD BE APPROVED AS CLASS SETTLEMENTS.5 1. The Court Has Personal Jurisdiction over the Settlement Class Because the Class Received Adequate Notice and an Opportunity to be Heard. In addition to having personal jurisdiction over the named Plaintiffs, who are parties to this litigation and agreed to serve as representatives for the Class, the Court also has personal jurisdiction over all members of the Settlement Class because the Class has received the requisite due process as specified by the United States Supreme Court. As stated by the Supreme Court, for a court to exercise jurisdiction over the claims of absent class members: 3 The Settlement Class is defined in the Notice of Pendency of Class Action, which was Exhibit G to the motion for preliminary approval (DE. 373), as follows: The "Settlement Class" or "Class," which this Court has conditionally certified for the purposes of the Settlement, consists of all persons who purchased, sold, held, and/or retained investments in "retirement trust" plans offered by PFA, or its affiliated companies, during the period commencing January 1999 through the present ("Class Period"). Excluded from the Class are the Defendants, PFA, PFA Assurance, PFA International, Claren TPA, Luis Cornide, Robert de la Riva and all of the Defendants' alter-ego entities, all employees or agents of Defendants and agents of the Defendants' alter-ego entities, all subsidiaries and affiliates of the Defendants, the Defendants' officers, agents, and employees, any agents or brokers (and their immediate family members) who sold or solicited the sale of investments in PFA or PFA Assurance. a IPM's allowed claim will be reduced for purposes of this distribution by the amount of any collateral recovery including its separate settlement with Lehman Brothers, and any settlement with Merrill Lynch. 5 Plaintiffs have already addressed the issue of class certification in the Motion for Preliminary Approval, and incorporate that discussion here. 9

10 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 10 of 41 [I]t must provide minimal procedural due process protection. The plaintiff must receive notice plus an opportunity to be heard and participate in the litigation, whether in person or through counsel. The notice must be the best practicable, 'reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.' Phillips Petroleum Co. v. Shutts, 472 U.S. 797, (1985) (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, (1950)). See also In re Prudential Ins. Co. of Am. Sales Practices Litig., 148 F.3d 283, 306 (3d Cir. 1998) ("[T]he district court obtains personal jurisdiction over the absentee class members by providing proper notice of the impending class action and providing the absentees with the opportunity to be heard or the opportunity to exclude themselves from the class."). These due process protections were provided with respect to the settlement. 2 The Best Practicable Notice Was Provided to the Class. Detailed notice, in the form approved by the Court, was mailed to the members of the Class based on the list of investors kept and updated by the Receiver.6 3. The Class Notice Was Reasonably Calculated to Inform Class Members of Their Rights. The notice provided to the Class members was sufficient to satisfy the requirements of due process because it described "the substantive claims... [and] contained information reasonably necessary to make a decision to remain a class member and be bound by the final judgment." In re Nissan Motor Corp. Antitrust Litig., 552 F.2d 1088, (5th Cir. 1977). The notice, among other things, defined the settlement Class, described the release to be given the settling parties by the settlement as well as the amount and proposed distribution of the settlement proceeds, and informed Class members of their right to opt-out and object, the 6 Pursuant to the Court ' s preliminary approval order (DE. 375), the Notice Administrator shall file a declaration of compliance with this notice plan within 14 days after the Fairness Hearing. 10

11 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 11 of 41 procedures for doing so, and the time and place of the final approval hearing. It also notified class members that a class judgment would bind them unless they opted out, and told them where they could obtain more information, such as access to a full copy of the Settlement Agreements. It further described in summary form the fact that Plaintiffs' counsel would be seeking attorneys' fees from the Settlement Fund not to exceed specified percentages of each Settling Party's contribution to the Settlement Fund. In addition to the Court-ordered notice, Plaintiffs' counsel have engaged in exhaustive efforts to keep Class members apprised of the progress of these proceedings and the details of these settlements. As set forth in the Declaration of Victor M. Diaz, Jr., filed simultaneously herewith (Exhibit A), Plaintiffs' counsel have, inter alia: a) sent out four status letters to direct client investors, for a total of 2,912 letters, regarding the progress of these proceedings; b) responded to approximately 2,969 investor s with questions regarding these settlements; c) fielded over 1,000 telephone calls from investors with questions about the status of the litigation and the details of these settlements; d) spent hundreds of hours following up on investor inquiries; and e) spent scores of hours in meetings or conferences with investors. In sum, this Court has personal jurisdiction over the entire Class because the Class was provided with the best practicable notice "reasonably calculated, under [the] circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). 4. The Settlements Should be Approved Because They Are Fair, Adequate and Reasonable. In determining whether to approve the settlements, the Court must decide whether they are "fair, adequate, reasonable, and not the product of collusion." Leverso, 18 F.3d 1527 at 1530; 11

12 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 12 of 41 also see Bennett v. Behring Corp., 737 F.2d 982, 986 (11th Cir ). The Eleventh Circuit has identified six factors to be considered in making this evaluation: (1) the existence of fraud or collusion behind the settlement; (2) the complexity, expense, and likely duration of the litigation; (3) the stage of the proceedings and the amount of discovery completed; (4) the probability of Plaintiffs' success on the merits; (5) the range of possible recovery; and (6) the opinions of the class counsel, class representatives, and the substance and amount of opposition to the settlement. Leverso, 18 F.3d at 1530 n.6. See also Bennett, 737 F.2d at 986. As set forth below, a consideration of each of these factors readily establishes that the settlements are fair, adequate and reasonable. 5. There is No Fraud or Collusion Behind the Settlements. The Court is well aware of the vigor with which the parties litigated these actions prior to reaching settlement. Indeed, Plaintiffs continue to litigate this matter on appeal as against Suntrust even after having been dismissed by this Court. The sharply contested nature of the extensive proceedings in this case demonstrates the lack of fraud or collusion behind the settlements. See, e.g., In re Sunbeam Sec. Litig., 176 F. Supp. 2d 1323, 1329 n.3 (S.D. Fla. 2001); Ingram v. Coca-Cola Co., 200 F.R.D. 685, 693 (N.D. Ga. 2001) (court had "no doubt that this case has been adversarial, featuring a high level of contention between the parties"); In re Motorsports Merchandise Antitrust Litig., 112 F. Supp. 2d 1329, 1338 (N.D. Ga. 2000) ("[t]his was not a quick settlement, and there is no suggestion of collusion"); Warren v. City of Tampa, 693 F. Supp. 1051, 1055 (M.D. Fla. 1988) (record showed 12

13 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 13 of 41 no evidence of collusion, but to the contrary showed " that the parties conducted discovery and negotiated the terms of settlement for an extended period of time" ), affd, 893 F.2d 347 (11th Cir. 1989). Settlement negotiations were conducted with similar vigor. Plaintiffs were represented by experienced counsel at these arms-length negotiations, including Aaron Podhurst, Harley S. Tropin and Victor M. Diaz, Jr. The experience of these lawyers, as well as their respective law firms, is discussed in the Declarations of Lead Counsel filed in connection with previous settlements (DE. 336), and in the resumes that have been filed with the Court. 6. Additional Years of Highly Complex and Expensive Litigation Will be Averted by the Settlement. This case involves almost 5,000 investors and losses that exceed $70 million. Moreover, because it is a securities class action, the PSLRA applies, requiring extensive litigation before the first deposition is even taken. The claims and defenses are complex and litigating them is difficult and time consuming. Although this case has been pending for more than three years, recovery by any means other than settlement would require additional years of litigation and the filing of new lawsuits against OB, RRPEV, and Haralson. See United States v. Glens Falls Newspapers, Inc., 160 F. 3d 853, 856 (2 d Cir. 1998) (noting that "a principal function of a trial judge is to foster an atmosphere of open discussion among the parties' attorneys and representatives so that litigation may be settled promptly and fairly so as to avoid the uncertainty, expense and delay inherent in a trial."). See also In re Domestic Air Transp. Antitrust Litig., 148 F.R.D. 297, 317, & n.32 (N.D. Ga. 1993) ("adjudication of the claims of two million claimants could last half a millennium"). 13

14 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 14 of 41 The settlement, on the other hand, provides immediate benefits. As stated by the court in In re Shell Oil Refinery, 155 F.R.D. 552 (E.D. La. 1993): The Court should consider the vagaries of litigation and compare the significance of immediate recovery by way of the compromise to the mere possibility of relief in the future, after protracted and expensive litigation. In this respect, '[i]t has been held proper to take the bird in the hand instead of a prospective flock in the bush.' Id. at 560 (alterations in original) (quoting Oppenlander v. Standard Oil Co., 64 F.R.D. 597, 624 (D. Colo. 1974)). See also In re US. Oil & Gas Litig., 967 F.2d 489, 493 (11th Cir. 1992) (noting that complex litigation "can occupy a court's docket for years on end, depleting the resources of the parties and taxpayers while rendering meaningful relief increasingly elusive"). Moreover, given that the "demand for time on the existing judicial system must be evaluated in determining the reasonableness of the settlement," Ressler v. Jacobson, 822 F. Supp. 1551, 1554 (M.D. Fla. 1992) (citation omitted), the appropriateness of the settlements is all the more apparent. 7. The Factual Record is Sufficiently Developed to Enable Plaintiffs and their Counsel to Make a Reasoned Judgment about The Settlements. Courts also consider "the degree of case development that class counsel have accomplished prior to settlement" to ensure that "counsel had an adequate appreciation of the merits of the case before negotiating." In re General Motors Corp. Pick-up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 813 (3d Cir. 1995). At the same time, "[t]he law is clear that early settlements are to be encouraged, and accordingly, only some reasonable amount of discovery should be required to make these determinations." Ressler, 822 F. Supp. at As noted above, discovery was never begun in this case because motions to dismiss were granted by this Court. It is not the case, however, that Plaintiffs or the Receiver were unaware of 14

15 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 15 of 41 the facts of these cases. Because of Plaintiffs' counsel's extensive efforts in direct fact gathering in both this country and in several Latin American countries and the efforts of the Receiver to obtain documents from Defendants and third parties, and the availability of those documents either in the Receiver's document depository or directly from the Receiver, Plaintiffs and the Receiver have achieved a considerable understanding of the liability and possible defenses of the Settling Parties, making an assessment of the merits of these settlements possible. This understanding was gleaned from a review of over ten thousand pages of document repository documents, numerous client interviews, and direct third-party factual investigation conducted by Plaintiffs' counsel. Therefore, before settling, the parties had developed ample information from which "to determine the probability of their success on the merits, the possible range of recovery, and the likely expense and duration of the litigation." Mashburn v. Nat'l Healthcare, Inc., 684 F. Supp. 660, 669 (M.D. Ala. 1988). 8. Plaintiffs Face Obstacles to Obtaining the Relief They Seek. "[T]he likelihood and extent of any recovery from the defendants absent [ ] settlement" is an important factor in assessing the reasonableness of a settlement. In re Domestic Air Transp., 148 F.R.D. at 314 (N.D. Ga. 1993). See also Ressler, 822 F. Supp. at 1555 ("A Court is to consider the likelihood of the plaintiffs success on the merits of his claims against the amount and form of relief offered in the settlement before judging the fairness of the compromise."). We believe that we have a compelling case against each of the Settling Parties. This Court, however, has disagreed as to Defendants LB and RJFS by granting dismissal of Plaintiffs' claims against them. And this Court's dismissal of Plaintiffs' claims certainly cannot be viewed as encouraging news for potential new cases to be filed against OB, RRPEV, and Haralson. Even if Plaintiffs institute new lawsuits against OB, RRPEV, and Haralson, it would take years of additional 15

16 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 16 of 41 litigation, overcoming vigorous legal defenses, to get these cases before a jury, where the outcome would still be uncertain. In light of the status of the litigation, and the uncertainties involved in instituting new litigation, the settlements are a fair compromise. See, e. g., Bennett v. Behring Corp., 96 F.R.D. 343, (S.D. Fla ) (plaintiffs faced a "myriad of factual and legal problems " that led to "great uncertainty as to the fact and amount of damage," which made it "unwise [for plaintiffs] to risk the substantial benefits which the settlement confers... to the vagaries of a trial"), aff d, 737 F.2d 982 (11th Cir. 1984); Enter. Energy Corp. v. Columbia Gas Transmission Corp., 137 F.R.D. 240, 248 (S.D. Ohio 1991) (citing the "very real potential that the [c]lass could come away from a long expensive trial with nothing," the court rejected the argument "that the Class should get more"). 9. The Benefits Provided by the Settlements Are Fair, Adequate and Reasonable When Compared with the Range of Possible Recovery. The analysis of determining whether a settlement is fair in light of the potential range of recovery should by guided by the "important maxim[]" that "the fact that a proposed settlement amounts to only a fraction of the potential recovery does not mean the settlement is unfair or inadequate." Behrens v. Wometco Enters., Inc., 118 F.R.D. 534, 542 (S.D. Fla. 1988), affd, 899 F.2d 21 (11th Cir. 1990). Indeed, "[a] settlement can be satisfying even if it amounts to a hundredth or even a thousandth of a single percent of the potential recovery." Id. This is because a settlement must be evaluated "in light of the attendant risks with litigation." Thompson v. Metropolitan Life Ins. Co., 216 F.R.D. 55, 64 (S.D.N.Y. 2003). "[C]ompromise is the essence of settlement." Bennett, 737 F.2d at 986. See also Linney v. Cellular Alaska P'ship, 151 F.3d 1234, 1242 ("[T]he very essence of a settlement is... a yielding of absolutes and an 16

17 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 17 of 41 abandoning of highest hopes.") (internal quotation omitted). Thus, courts regularly find settlements to be fair where "[p]laintiffs have not received the optimal relief." Warren, 693 F. Supp. at See also Linney, 151 F.3d at 1242 ("The proposed settlement is not to be judged against a hypothetical or speculative measure of what might have been achieved by the negotiators.") (emphasis in original); Great Neck Capital Appreciation Investment P'ship, L.P. V. Price WaterHouseCoopers, L.L.P., 212 F.R.D. 400, (E.D. Wis. 2002) ("The mere possibility that the class might receive more if the case were fully litigated is not a good reason for disapproving the settlement."). The settlements provide substantial value to the Class in terms of the $2,055,000 that will be contributed to the Settlement Fund. These funds, combined with the more than $25 million in other recoveries obtained through the efforts of Plaintiffs' counsel, the Receiver, and the SEC, are a substantial monetary step toward making the Class whole. 10. The Opinions of Class Counsel, Class Representatives, and Absent Class Members Favor Approval of the Settlements. The Court should give "great weight to the recommendations of counsel for the parties, given their considerable experience in this type of litigation." Warren, 693 F. Supp. at 1060; also see Mashburn, 684 F. Supp. at 669 ("If plaintiffs' counsel did not believe these factors all pointed substantially in favor of this settlement as presently structured, this Court is certain that they would not have signed their names to the settlement agreement."); In re Domestic Air Transp., 148 F.R.D. at ("In determining whether to approve a proposed settlement, the Court is entitled to rely upon the judgment of the parties' experienced counsel. '[T]he trial judge, absent fraud, collusion, or the like, should be hesitant to substitute its own judgment for that of counsel."' (citations omitted)). 17

18 Case 1 :05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 18 of 41 We expect little or no opposition to these proposed settlements. As many courts have noted: "[A] small number of objectors from a plaintiff class of many thousands is strong evidence of a settlement ' s fairness and reasonableness." Assn for Disabled Ams. v. Amoco Oil Co., 211 F.R. D. 457, 467 (S.D. Fla ). See also Ingram, 200 F.R.D. at 692 n.7 ("[A] relatively small number of objectors can be taken as 'some indication that the class members as a group did not think the settlement was unfair."' (citation omitted)); Austin v. Pennsylvania Dept. of Corrections, 876 F. Supp. 1437, 1458 (E.D. Pa. 1995) (" Because class members are presumed to know what is in their best interest, the reaction of the class to the Settlement Agreement is an important factor for the court to consider."). For all the above reasons, these proposed settlements are fair, adequate and reasonable and should receive final approval. C. THE SETTLEMENTS SHOULD BE APPROVED AS RECEIVER'S SETTLEMENTS The Amended Receivership Order at Paragraph 6 empowers the Receiver to settle actions where the Receiver is a party with the approval of this Court. The proposed settlements will result in significant benefits to the Receivership Estate by avoiding the continued risk, expense and delay inherent in all litigation, and payment of significant settlement amounts followed by significant distributions to Receivership creditors. Securities and Exchange Commission v. Credit Bancorp, Ltd., 2002 WL (S.D. N.Y. 2002); In re Justice Oaks, II, Ltd., 898 F.2d 1544, 1549 (11th Cir. 1990); In re Arrow Air, Inc., 85 B.R. 886 (Bkrtcy. S.D. Fla. 1988) (approving a proposed settlement of litigation for these exact reasons).? The approval of the settlements is a matter of discretion and will not be disturbed or modified on appeal unless Although Justice Oaks and Arrow Air dealt with settlements in a bankruptcy context, courts have noted the similarity in purpose and duty of a bankruptcy trustee and an equity receiver. Scholes v. Lehmann, 56 F.3d 750, 753 (7`h Cir, 1995). 18

19 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 19 of 41 approval or disapproval is an abuse of discretion. Id. at 891. To aid the court in making its determination, the court must be given all the relevant facts and must evaluate whether the compromise falls below the "lowest point in the range of reasonableness." Id. (citing In re Teltronics Services, Inc., 762 F. 2d 185, 189 (2d Cir. 1985); In re Jackson Brewing Co., 624 F.2d 599, (5th Cir. 1980). When deciding whether to approve or disapprove a settlement, the Eleventh Circuit, echoing the Arrow Air court, has considered the following factors: (a) The probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved; (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises. See In re Justice Oaks II, Ltd., 898 F.2d at 1549 (citing Martin v. Kane (In re A&C Properties), 784 F.2d 1377, 1381 (9th Cir. 1986) (quoting In re Flight Transp. Corp. Sec. Litig., 730 F.2d 1128, 1135 (8th Cir. 1984), cert. denied, 469 U.S (1985), cert. denied, 479 U.S. 854 (1986)). In Arrow Air, Inc., a Chapter 11 corporate debtor and committee of unsecured creditors sought approval of the settlement of class litigation brought by the class against the debtor and others. Arrow Air, Inc., 85 B.R. at 887. The court approved the settlement, reasoning that the settlement would eliminate claims against the estate and provide for payment to the estate of $300,000. Id at 892. Furthermore, the court noted that by settling, the continued expense, risks, and delay of litigation would be avoided. Id. Thus, because the settlement was "clearly in the best interest of all creditors of the estate," the court granted the motion. Id. These settlements will result in a substantial recovery by Settlement Class Members (who are also creditors of the receivership to the extent of their allowed claims). This result is 19

20 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 20 of 41 accomplished without the expense, delay and risk of continued litigation with the Settling Parties. In short, the settlements, like the settlement that was ultimately approved in Arrow Air, are in the best interest of the Receivership estate and should be approved. D. CLASS COUNSEL'S FEE REQUEST SHOULD BE GRANTED Class Counsel additionally request that the Court award attorneys' fees and expenses to them based upon the common fund created through our efforts in reaching these settlements. The attorneys' fee requested is as follows: 25% of the $1,000,000 to be paid by OB; 25% of the $700,000 to be paid by RRPEV; 25% of the $235,000 to be paid by Haralson/Medmarc; 25% of the $100,000 to be paid by LB; 15% of the $20,000 to be paid by RJFS; and expenses. In total, we are seeking $501,750 in fees and $31, in out-of-pocket expenses. The fee request is well within the range of percentages recognized as appropriate by the Eleventh Circuit under Camden I Condominium Assn v. Dunkle, 946 F.2d 768 (11th Cir. 1991). Moreover, this amount is substantially less than our fee lodestar, which means that we will no receive no multiplier for the risk of non-recovery, the quality of opposing counsel, the complexity and difficulty of this matter and our foregoing of other work in order to pursue this case. For the reasons set forth below, we believe that the requested fee award is appropriate, fair and reasonable. 20

21 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 21 of The Law Awards Plaintiff ' s Counsel Fees from the Common Fund Created Through their Efforts. It is well established that when a representative party has conferred a substantial benefit upon a class, class counsel is entitled to an allowance of attorneys' fees based upon the benefit obtained. Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980); Mills v. Electric Auto-Lite Co., 396 U.S. 375, (1970); Camden I Condominium Assn v. Dunkle, 946 F.2d 768, 771 (11th Cir. 1991); Ramey v. Cincinnati Enquirer, Inc., 508 F.2d 1188, (6th Cir. 1974). The substantial benefit doctrine is an exception to the general rule that each party must bear its own litigation costs. The doctrine serves the "twin goals of removing a potential financial obstacle to a plaintiffs pursuit of a claim on behalf of a class and of equitably distributing the fees and costs of successful litigation among all who gained from the named plaintiffs efforts." In re Gould Sec. Litig., 727 F. Supp. 1201, 1202 (N.D. Ill. 1989) (citation omitted). See also Reiser v. Del Monte Properties Co., 605 F.2d 1135, 1139 (9th Cir. 1979); Ramey, 508 F.2d at The doctrine is based on the premise that those who receive the benefit of a lawsuit without contributing to its costs are "unjustly enriched" at the expense of the successful litigant. Van Gemert, 444 U.S. at 478; Mills, 396 U.S. at 392. The Supreme Court, the Eleventh Circuit, and courts in this District have thus all noted that "[a] litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as whole." See In re Sunbeam Sec. Litig., 176 F. Supp. 2d 1323, 1333 (S.D. Fla. 2001) (citing Boeing Co. v. Van Gemert, 100 S. Ct. 745 (1980)); see also Camden I, 946 F.2d at 771 ("Attorneys in a class action in which a common fund is created are entitled to compensation for their services from the common fund, but the amount is subject to court approval.") 21

22 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 22 of 41 Courts also have recognized that appropriate awards of attorneys' fees in cases such as this encourage redress for wrongs caused to entire classes of persons, as well as discourage future misconduct of a similar nature: [C]ourts... have acknowledged the economic reality that in order to encourage 'private attorney general' class actions brought to enforce... laws on behalf of persons with small individual losses, a financial incentive is necessary to entice capable attorneys, who otherwise could be paid regularly by hourly-rate clients, to devote their time to complex, time-consuming cases for which they may never be paid. Mashburn v. National Healthcare, Inc., 684 F. Supp. 679, 687 (M.D. Ala. 1988). See also Deposit Guaranty National Bank v. Rope, 445 U.S. 326, (1980). Adequate compensation promotes the availability of counsel for plaintiffs: If the plaintiffs' bar is not adequately compensated for its risk, responsibility, and effort when it is successful, then effective representation for plaintiffs in these cases will disappear... We as members of the judiciary must be ever watchful to avoid being isolated from the experience of those who are actively engaged in the practice of law. It is difficult to evaluate the effort it takes to successfully and ethically prosecute a large plaintiffs' class action suit. It is an experience in which few of us have participated. The dimensions of the undertaking are awesome. Muehler v. Land O'Lakes, Inc., 617 F. Supp. 1370, (D. Minn. 1985) (awarding requested 35% fee). In the Eleventh Circuit, class counsel are awarded a percentage of the funds generated through a class action settlement. In Camden I - the controlling authority in this circuit dealing with the issue of attorneys' fees in common-fund class-action cases - the Eleventh Circuit held that "the percentage of the fund approach [as opposed to the lodestar approach] is the better reasoned in a common fund case. Henceforth in this circuit, attorneys' fees awarded from a common fund shall be based upon a reasonable percentage of the fund established for the benefit 22

23 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 23 of 41 of the class." Camden I, 946 F.2d at 774. Class Counsel may receive a percentage of the common fund they have generated for the class, regardless of the applicability of any fee-shifting statute. The common fund in such instances includes the amount paid by the defendant to extinguish exposure for statutory fees. See, e.g., Brytus v. Spang & Co., 203 F.3d 238 (3d Cir. 2000); Florin v. Nationsbank, 34 F.3d 560 (7th Cir. 1994); Skelton v. General Motors Corp., 860 F.2d 250, 255 (7th Cir. 1988); In re Fine Paper Antitrust Litig., 751 F.2d 562, 583 (3d Cir. 1984). The Court has substantial discretion in determining the appropriate fee percentage awarded to counsel. "There is no hard and fast rule mandating a certain percentage of a common fund which may be awarded as a fee because the amount of any fee must be determined upon the facts of each case." In re Sunbeam, 176 F. Supp. 2d at 1333 (quoting Camden I, 946 F.2d at 774). Nevertheless, "[t]he majority of common fund fee awards fall between 20% to 30% of the fund," although "an upper limit of 50% of the fund may be stated as a general rule." Id. (quoting Camden I, 946 F.2d at ); see also Waters v. Intern. Precious Metals Corp., 190 F.3d 1291 (11th Cir. 1999) (approving fee award where the district court determined that the benchmark should be 30% and then adjusted the fee award higher based on the circumstances of the case). Our fee request, at less than 25%, falls comfortably within this range. 2. The Eleventh Circuit's Camden I Factors Support Plaintiffs' Counsel' s Requested Fee. The Eleventh Circuit has provided a set of factors the Court should use to determine a reasonable percentage to award class-action counsel. These factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions involved; 23

24 Case 1 : 05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 24 of 41 (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the 'undesirability' of the case; (11) the nature and the length of the professional relationship with the client; (12) awards in similar cases. Camden I, 946 F.2d at 772 n.3 (citing factors originally set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, (5th Cir. 1974)). These twelve factors are not exclusive. "Other pertinent factors are the time required to reach a settlement, whether there are any substantial objections by class members or other parties to the settlement terms or the fees requested by counsel, any non-monetary benefits conferred upon the class by the settlement, and the economics involved in prosecuting a class action." In re Sunbeam, 176 F. Supp. 2d at 1333 (quoting Camden I, 946 F.2d at 775). Furthermore, these factors are merely guidelines. The Eleventh Circuit has also "encouraged the lower courts to consider additional factors unique to the particular case." Id. (quoting Walco Investments, Inc. v. Thenen, 975 F. Supp. 1468, 1472 (S.D. Fla. 1997)). Applied here, the Camden I factors establish that the Court should award Plaintiffs' Counsel the fees they have requested. 24

25 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 25 of 41 a. The Cases Against the Settling Parties Required Substantial Time and Labor. These cases have demanded substantial time and labor, including considerable briefing of motions to dismiss, class certification briefing, and appellate briefing, as well as hundreds of hours spent reviewing thousands of pages of documents in the Receiver's depository and meeting with clients and knowledgeable third-party witnesses in Latin America to learn about their claims and keep them informed about the progress of the case. Further, in reaching the settlements presently before the Court, counsel for Plaintiffs were required to negotiate and reach agreement with five separate Settling Parties, each represented by able attorneys. The negotiations were lengthy and complex, and produced a fair and reasonable settlement to which we expect little or no opposition. As this Court knows, one of the unique challenges facing plaintiffs counsel in securities class action cases is how to overcome the substantial barriers imposed by the PSLRA without the benefit of any discovery. These cases require considerable experience and a high degree of skill, along with an exhausting expenditure of effort, at a level generally unknown in other types of cases, even those involving class allegations. As Plaintiffs' counsel's declarations establish (Exhibits A and B), we have expended more than 2648 hours prosecuting this case since the previous settlements, in reviewing available documents, conducting a through investigation without the benefit of access to the normal discovery tools, and negotiating advantageous settlements. Anything less than this type of effort would have diminished or destroyed our ability to achieve these settlements. b. The Cases' Issues Require the Exceptional Skill of a Highly Talented Group of Attorneys. As noted above, litigation of a case like this requires counsel highly trained in class 25

26 Case 1 : 05-cv KMM Document 378 Entered on FLSD Docket 11/12 /2008 Page 26 of 41 action matters and in the specialized issues securities cases present. All of the lawyers representing Plaintiffs possess these attributes, making their participation in this matter a significant addition of value for Plaintiffs and the Class. The record before the Court establishes that this case involved significant challenges to Plaintiffs' counsel. The skill of counsel must be commensurate with the novelty and complexity of the issues in the case, as well as the skill of the opposing counsel. See Walco, 975 F. Supp. at 1472 (explaining that "[g]iven the quality of defense counsel from prominent national law firms, the Court is not confident that attorneys of lesser aptitude could have achieved similar results"). As another judge of this Court has previously noted in another case in which one of the undersigned Counsel participated, also a securities fraud matter, the "experience and competency" of counsel was "evident in both their pleadings and oral presentations to the Court." Walco v. Thenen, 168 F.R.D. 315, 327 (S.D. Fla. 1996). We have extensive experience in complex litigation and, in particular, with securities litigation. Our records and accomplishments detailed in our resumes speak for themselves. In assessing the quality of representation by Plaintiffs' Counsel, the Court also should consider the quality of the opposition. See, e.g., Camden I, 946 F.2d at 772 n.3; Johnson, 488 F.2d at 718; Ressler v. Jacobson, 149 F.R.D. 651, 654 (M.D. Fla. 1992). The settling parties are represented by extremely able and diligent attorneys. To name a few, Lehman Brothers is represented by the national firm Morgan, Lewis & Bockius; Raymond James is represented by the well-respected, local litigation firm Kenny Nachwalter, and Ocean Bank is represented by the well-respected banking firm Avila Rodriguez Hernandez Mena & Ferry. To say the least, these were worthy, and highly competent, adversaries. 26

27 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 27 of 41 c. The Cases Against The Settling Parties Entailed Considerable Risk. These cases entailed considerable risk. Because of the PSLRA, any lawyer accepting a securities fraud case faces a substantial hurdle to develop sufficient factual support to overcome the initial motion to dismiss. are many and substantial. The issues in securities litigation are complex, and the legal hurdles The settling parties mounted vigorous defenses, accompanied by a complete denial of responsibility or legal liability. The time and expense demands are daunting, obviating counsel's ability to work on numerous other matters. Success under these circumstances is a considerable milestone. Such circumstances justify an appropriate fee award. "A court's consideration of this factor recognizes that counsel should be rewarded for taking on a case from which other law firms shrunk. Such aversion could be due to any number of things, including social opprobrium surrounding the parties, thorny factual circumstances, or the possible financial outcome of a case. All of this and more is enveloped by the term 'undesirable."' In re Sunbeam, 176 F. Supp. 2d at Courts have also made clear that if, by their skill and determined efforts, plaintiffs' counsel ultimately secure a settlement, that fact is not relevant to assessing the risk they assumed at the case's inception. See Skelton v. General Motor Corp., 860 F.2d 250, 258 (7th Cir. 1988), cert. denied, 493 U.S. 810 (1989) ("The point at which plaintiffs settle with defendants... is simply not relevant to determining the risks incurred by their counsel in agreeing to represent them."); Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102, 112 (3d Cir. 1976); Walco, 975 F. Supp. at "Undesirability" and relevant risks must be evaluated from the standpoint of plaintiffs' counsel as of the time they commenced the suit, and not retroactively with the benefit of hindsight. 27

28 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 28 of 41 The risks in this matter were present at the outset. As Michael Hanzman, an experienced attorney in securities class litigation, explains: [I]t is self-evident that plaintiffs securities class action cases are exceeding difficult to successfully prosecute. The PSLRA and the heightened pleading standards it embodies place before plaintiffs an immense challenge just to get out of the gate. They require significant investigation of the factual parameters of the claim prior to discovery, limiting the tools available to counsel to meet those requirements. Only after motions to dismiss are overcome does the action begin in earnest, meaning that significant labor is required just to get to the point where you can really start developing the case. Hanzman Aff. 16 (DE ). d. Class Counsel Assumed Substantial Risk and Pursued These Cases on a Pure Contingency Basis. This action was prosecuted by counsel entirely on a contingent fee basis. In undertaking to prosecute this complex action on that basis, counsel assumed a significant risk of nonpayment or underpayment. That risk warrants an appropriate fee. Numerous cases recognize that the contingent fee risk is an important factor in determining the fee award. "A contingency fee arrangement often justifies an increase in the award of attorney ' s fees." In re Sunbeam, 176 F. Supp. 2d at 1335 (quoting Behrens v. Wometco Enters., Inc., 118 F.R.D. 534, 548 (S.D. Fla ), affd 899 F.2d 21 (11th Cir )). See also In re Continental Illinois Sec. Litig., 962 F.2d 566 (7th Cir. 1992) (holding that when a common fund case has been prosecuted on a contingent basis, plaintiffs ' counsel must be compensated adequately for the risk of non -payment); Ressler, 149 F.R.D. at 656 ("Numerous cases recognize that the attorney ' s contingent fee risk is an important factor in determining the fee award."); Walters v. Atlanta, 652 F. Supp. 755, 759 (N.D. Ga. 1985), modified, 803 F.2d 1135 ( 11th Cir.); York v. Alabama State Bd. ofeducation, 631 F. Supp. 78, 86 (M.D. Ala. 1986). 28

29 Case 1 : 05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 29 of 41 Public policy concerns, particularly the availability of experienced and able counsel to classes of injured plaintiffs whose individual claims defy vindication, also justify such a fee award. As this Court has noted: Generally, the contingency retainment must be promoted to assure representation when a person could not otherwise afford the services of a lawyer. A contingency fee arrangement often justifies an increase in the award of attorney's fees. This rule helps assure that the contingency fee arrangement endures. If this "bonus " methodology did not exist, very few lawyers could take on the representation of a class client given the investment of substantial time, effort, and money, especially in light of the risks ofrecovering nothing. Behrens v. Wometco Enters., Inc., 118 F.R.D. 534, 548 (S.D. Fla ), affd, 899 F.2d 21 (11th Cir. 1990) (emphasis added). The risk inherent in taking these cases on a contingency fee basis is demonstrated by this Court's dismissal of the complaint. Had Plaintiffs' counsel not achieved significant settlements both prior to and subsequent to the dismissal, we could have gone completely uncompensated for the millions of dollars of time we put into these cases. Losses of this magnitude can severely damage or destroy firms of the relatively small size of our Plaintiffs' firms. Accordingly, there can be no dispute that these cases entailed substantial risk. In taking this case, we assumed the risk of receiving no payment for millions of dollars in fees and hundreds of thousands of dollars in out-of-pocket expenses, over three years of litigation. The time we spent on this case was time that we could not spend on other matters. This factor alone argues convincingly in favor of our requested fees. e. Class Counsel Have Achieved Excellent Results. The settlements we have achieved are significant, particularly in light of the fact that PFA 29

30 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 30 of 41 is defunct, and investors' principal hope of recovering their investments is the success of the appeal against Suntrust and litigation or negotiation with third parties like Ocean Bank, Haralson, and RRPEV. Instead of facing additional years of costly litigation, Class members will benefit in the very near term from a substantial settlement fund. In addition to the more than $31 million already distributed, the Class will shortly receive a distribution of approximately $1.5 million, representing the estimated amount of the Net Settlement Fund. These settlements are an excellent achievement. f. Plaintiffs' Counsel's Fee Request Comports with Customary Fees and Awards in Similar Cases. The fee requested here is well within customary charges and the experience of similar cases. Moreover, a fee award of less than 25% of a common fund is well within the range of what may be considered customary. See, e.g., In re Sunbeam, 176 F. Supp. 2d at In fact, many recent decisions in this Circuit have routinely awarded attorneys' fees up to and at times in excess of 30%, which further confirms the fairness and reasonableness of the fee requested here.8 Our fee request is below the average in the private marketplace, where contingency fee arrangements ranging from 30% to40% are standard. See, e.g., In re Continental Illinois Sec. 8 See, e.g., Waters v. Intl Precious Metals Corp., 190 F.3d 1291 (11h Cir. 1999) (awarding 33 1/3%); Diaz v. Hillsborough County Hosp. Authority, 2000 WL (M.D. Fla. Aug. 7, 2000) (awarding 30%); see also Tapken v. Brown, Case No CIV-Marcus (S.D. Fla. 1995) (awarding 33%); In re Int'l Recovery Corp. Sec. Litig., Case No CIV-Atkins (S.D. Fla. 1994) (fee award represented 30% of class benefit); In re Sound Advice, Inc. Sec. Litig., Case No CIV-Ungaro-Benages (S.D. Fla. 1994) (awarding 30%); In re Belmac Corp. Sec. Litig., Case No CIV-T-23-(C) (M.D. Fla. 1994) (awarding 31%); Holloway v. Chapnick, Consol. Case No CIV-Paine (S.D. Fla. 1994) (awarding 30%); In re Perfumania, Inc. Sec. Litig., Case No CIV-Marcus (S.D. Fla. 1993) (awarding 30%); In re Royce Lab., Inc. Sec. Litig., Case No CIV-Moore (S.D. Fla. 1993) (awarding 30%); Kaser v. Swann, Case No CIV-Orl-3A18 (M.D. Fla. 1993) (awarding 30%); In re Home Shopping Network Sec. Litig., Case No T-13(A) (M.D. Fla. 1991) (awarding 33%). 30

31 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 31 of 41 Litig., 962 F.2d 566, 572 (7th Cir. 1992) ("The object in awarding a reasonable attorneys' fee... is to simulate the market."); RJR Nabisco, Inc. Sec. Litig., Fed. Sec. L. Rep. (CCH) 94,268 (S.D.N.Y. 1992) ("what should govern [fee] awards is... what the market pays in similar cases...."); see also Kirchoff v. Flynn, 786 F.2d 320, 325 (7th Cir. 1986) ("When the 'prevailing' method of compensating lawyers for 'similar services' is the contingent fee, then the contingent fee is the 'market rate."') (emphasis in original). As Justices Brennan and Marshall observed in one concurring opinion: "In tort suits, an attorney might receive one-third of whatever amount the Plaintiff recovers. In those cases, therefore, the fee is directly proportional to the recovery." Blum v. Stenson, 465 U.S. 886, 904 ( 1984 ). See also Kirchoff, 786 F.2d at 323, 325 n.5 (observing that "40% is the customary fee in tort litigation"); In re Public Service Co., Fed. Sec. L. Rep. (CCH) 96,988 at 94, (S.D. Cal. 1992) ("If this were a non-representative litigation, the customary fee arrangement would be contingent on a percentage basis, and in the range of 30% to 40% of the recovery."). The record here establishes that Plaintiffs' counsel's fee request is customary and comports with those in similar cases. A leading advocate in complex commercial and class action cases - Joseph Matthews - has provided a declaration attesting to the reasonableness of the fee requested in this case. (Exhibit Q. g. The Remaining Camden I Factors Also Favor Approving Class Counsel's Fee Request. The remaining Camden I factors also weigh in favor of granting our fee request. First, the burdens of this litigation have precluded our pursuit of other cases. The relatively small size of the firms representing Plaintiffs and the major commitment involved in accepting this representation precluded our firms from working on other matters and accepting other 31

32 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 32 of 41 representations. Moreover, our fee request is firmly rooted in "the economics involved in prosecuting a class action." See In re Sunbeam, 176 F. Supp. 2d at Without adequate compensation and financial reward, cases such as this could not be pursued. It is worthy of note that the United States attracts, and relies upon, a tremendous amount of foreign investment, much of it directed to the various American stock markets. Such was certainly the case with the investor-victims here, all of whom reside in Latin American, and all of whom sought out the investments that PFA offered because they were led to believe that their funds would ultimately be placed in mutual funds investing in those very stock markets. It is absolutely essential that foreign investors, and indeed all investors, have confidence in our financial systems, and that when a fraud like this is perpetrated, that those investors have recourse to recover their funds. Needless to say, the availability of skilled counsel is essential to the effective functioning of this system. 3. The Requested Fee Is Also Reasonable When Cross Checked Against the "Lodestar" Approach. Some courts use the lodestar method as a cross-check of the percentage of the fund approach. In re Sunbeam, 176 F. Supp. 2d at 1336 (citing Ressler, 149 F.R.D. at 653 n.4). Applied here, the lodestar method shows Class Counsel's fee request is modest, and easily passes muster. Class Counsel have expended $844, in billable time and $31, in out-ofpocket expenses since the last settlement, totaling $876, The fee request is substantially less than this lodestar - in fact, less than 60% of the lodestar. If the lodestar approach applied, this case would justify a substantial multiplier. In a pre- Camden I case, the Court performed both methods of analysis and gathered cases on the range of fee awards under either method and noted that lodestar multiples "in large and complicated class 32

33 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 33 of 41 actions" range from 2.26 to 4.5, while "three appears to be the average." Behrens v. Wometco Enter., Inc., 118 F.R.D. 534 (S.D. Fla ). In many cases, including cases in this jurisdiction, multiples much higher than three have been approved. See, e.g., Weiss v. Mercedes-Benz of North America, Inc., 1995 U.S. Dist. LEXIS (D.N.J. 1995) (multiple of 9.3 times lodestar); In re RJR Nabisco, Inc. Sec. Litig., Fed. Sec. L. Rep. (CCH) 96,984 (S.D.N.Y. 1992) (multiple of 6 times lodestar ); Cosgrove v. Sullivan, 759 F. Supp. 166 (S.D.N.Y. 1991) (multiple of 8.74); Glendora Comm. Redevelopment Agency v. Demeter, 155 Cal. App. 3d 465 (1984) (multiple of 12 times lodestar); Grimshawe v. New York Life Insurance Co., Case No Civ-Nesbitt (S.D. Fla. 1996) (percentage-based fee award equivalent to a multiple of 8.5). Considering that a multiplier would surely be justified in this case, Plaintiffs' Counsel's fee request, which is less than our lodestar, easily satisfies the cross check using the lodestar method. III. CONCLUSION As set forth above, these proposed settlements are excellent results, and provide members of the Class with immediate compensation for their considerable losses, even as the Receiver and counsel for Plaintiffs continue to pursue recovery from Suntrust, as to whom they have appealed the dismissal order. The settlements handily satisfy the standard for fairness and reasonableness as a matter of law, and the standards for approval of a Receivership settlement. In addition, counsel's fee request is fair and reasonable. It satisfies the guidelines of Camden I, especially in light of the complicated nature of the case, the time, effort, and skill required to litigate and reach these settlements, and the outstanding results we have obtained. Accordingly, the Receiver and Plaintiffs respectfully request that this Court grant this motion for final approval of the settlements and the petition for attorneys' fees and expenses. 33

34 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 34 of 41 Dated: November 12, 2008 Victor M. Diaz, Esq. Co-Counselfor Lead Plaintiffs Podhurst, Orseck, P.A. 25 West Flagler Street, Suite 800 Miami, Florida Telephone : Facsimile : vdiaz e,podhurst.com Harley S. Tropin, Esq. Co-Counselfor Lead Plaintiffs 2525 Ponce de Leon, 9th Floor Coral Gables, Florida Telephone: Facsimile : hst@kttlaw.com By: /s/victor M. Diaz Victor M. Diaz, Esq., FBN John Gravante, Esq., FBN By: /s/david M. Buckner Harley S. Tropin, Esq., FBN David M. Buckner, Esq., FBN TEW CARDENAS LLP Four Seasons Tower, 15th Floor 1441 Brickell Avenue Miami, Florida /s/david M. Levine David M. Levine, Esq., FBN: Counsel for the Receiver 34

35 Case 1 : 05-cv KMM Document 378 Entered on FLSD Docket 11/12 /2008 Page 35 of 41 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was served on the parties of the attached list via electronic mail distribution through the court's CM/ECF system and/or electronic mail and, for those parties not registered with the CM/ECF system and without electronic mail, by U.S. mail on the 12th day of November, By: /s/david M. Buckner David M. Buckner, Esq. 3381/101 /295,277.1 Kozyak Tropin &3'hrockmorton, P.A.

36 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 36 of 41 SERVICE LIST CASE NO CIV-MOORE Christian Bartholomew, Esq. Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, NW Washington, D.C Attorneys for Lehman Brothers Bobby Brochin, Esq. Morgan, Lewis & Bockius LLP 5300 Wachovia Financial Ctr. 200 S. Biscayne Blvd., Suite 5300 Miami, FL Rbrochinkmorganlewis. com Attorneys for Lehman Brothers Patricia Gorham, Esq. Richard L. Robbins, Esq. Ellen B. Cohen, Esq. Sutherland Asbill & Brennan LLP 999 Peachtree Street, NE, Suite 2300 Atlanta, Georgia Patricia. com Attorneys for Merrill Lynch Dean Bunch, Esq. Sutherland Asbill & Brennan LLP 3600 Maclay Blvd., S., Suite 202 Tallahassee, Florida Dean. Bunch(dsablaw. com Attorneys for Merrill Lynch Rudolph Aragon, Esq. Angela Daker, Esq. White & Case LLP Wachovia Financial Center, Suite South Biscayne Boulevard Miami Florida Attorneys for Merrill Lynch Richard Critchlow, Esq. Harry Schafer, Esq. mailto : ncc,kennynachwalter.com Kenny Nachwalter, P.A Miami Center 201 S. Biscayne Boulevard Miami, Florida RAC@kennynachwalter.com HRS@kennynachwalter.com Attorneys for Raymond James Theresa L. Davis, Esq. Jonathan S. Feld, Esq. David H. Kistenbroker, Esq. Katten Muchin Rosenman LLP 525 W. Monroe St., Suite 1900 Chicago, Illinois theresa. jonathan.feld@kattenlaw.com david.kistenbroker@kattenlaw.com Attorneys for HSBC Thomas E. Scott, Esq. Cole, Scott & Kissane, P.A. Pacific National Bank Building 1390 Brickell Ave., 3`a Floor Miami, Florida TES(cicskle a Attorneys for HSBC Jeffrey R. Sonn, Esq. Sonn & Erez 100 S.E. Third Avenue Suite 1500 Fort Lauderdale, Florida Jsonn@investorlaw.us Attorneys for OIG, Inc. 36

37 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 37 of 41 David M. Levine, Esq. Jeffrey C. Schneider, Esq. Tew Cardenas LLP Four Seasons Tower, 15th Floor 1441 Brickell Avenue Miami, Florida JCSg,tewlaw.com Co-Counsel for Thomas G. Schultz, Receiver Marty Steinberg, Esq. Samuel A. Danon, Esq. Hunton & Williams LLP 1111 Brickell Avenue Suite 2500 Miami, Florida Msteinberg ghunton.com Sdanon@hunton.com Attorneys for Suntrust Jonathan Cohen, Esq. Dario A. Perez, Esq. Sandra M. Upegui, Esq. Shutts & Bowen, LLP 1500 Miami Center 201 South Biscayne Blvd. Miami, Florida jcohen@ shutts-law.com dperez@ shutts-law.com supegui@ shutts - law.com Attorneys for IPM Luis S. Konski, Esq. Becker & Poliakoff, P.A. 121 Alhambra Plaza, 10 Floor Coral Gables, FL Attorneys for Cornide & De La Riva A.C. Brooke Clagett, Esq. Morgan, Lewis & Bockius, LLP 1111 Pennsylvania Ave, NW Washington, DC Attorneys for Lehman Brothers, Inc. B clagettna,mor ganlewi s. com Richard L. Robbins, Esq. Terry R. Weiss, Esq. Sutherland, Asbill & Brennan, LLP 999 Peachtree Street, N.E. Atlanta, Georgia Attorneys for Merrill Lynch, Pierce, Fenner & Smith Incorporated Richard.robbins@ sablaw.com Carlos Velasquez, P.A. Carlos Velasquez, Esq. 101 N. Pine Island Road Suite 201 Plantation, Florida Carlos(ai,Velasquez-law.com Victor M. Diaz, Jr., Esq. Podhurst Orseck, P.A. 25 West Flagler Street, Suite 800 Miami, FL vdiaz e,podhurst.com Attorneys for Class Plaintiffs Juan A. Gonzalez, Esq. Lieber, Gonzalez & Portuondo, P.A. Courthouse Tower, 25th Floor 44 West Flagler Street Miami, FL Attorneys for Instituto de Prevision Militar & Inverma S.A. 37

38 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 38 of 41 SECURITIES AND EXCHANGE COMMISSION Vs. PENSION FUND OF AMERICA, ET AL CASE No CIV-MOORS SERVICE LIST Thomas G. Schultz, Receiver Tew Cardenas LLP Four Seasons Tower, 15`1 Floor 1441 Brickell Avenue Miami, Florida Telephone: Facsimile: tgs(d tewlaw.com David M. Levine, Esq. Jeffrey C. Schneider, P.A. Counsel for Receiver Tew Cardenas LLP Four Seasons Tower, 15`h Floor 1441 Brickell Avenue Miami, Florida Telephone: Facsimile: dml(c,tewlaw.com jcs a,tewlaw.com Thomas E. Scott, Esq. Co-Counsel for HSBC Bank, USA Cole, Scott & Kissane, PA Pacific National Bank Building 1390 Brickell Avenue, Third Floor Miami, Florida Telephone: Facsimile: alcom Robert K. Levenson, Esq. Counsel for Securities & Exchange Commission 801 Brickell Avenue Suite 1800 Miami, Florida Telephone: Facsimile: levensonr(a),sec.gov Kathy E. Rentas, Esq. Counselfor Juan De La Riva, Robert De La Riva and Luis Cornide Becker & Poliakoff, P.A Stirling Road Ft. Lauderdale, Florida Telephone: Facsimile: Harley S. Tropin, Esq. John Kozyak, Esq. Tucker Ronzetti, Esq. David P. Milian, Esq. Co-Counselfor class representatives 2525 Ponce de Leon, 9`h Floor Coral Gables, Florida Telephone: Facsimile: dpm(akttlaw.com

39 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 39 of 41 Guy Lewis, Esq. Michael Tein, Esq. Counsel for Robert De La Riva and Luis Cornide Lewis Tein, P.A Grand Avenue, Suite 340 Miami, Florida Telephone: Facsimile: ewis@lewistein.com mtein@lewistein.com Victor M. Diaz, Esq. John Gravante, Esq. Co-Counsel for class representatives Podhurst, Orseck, P.A. 25 West Flagler Street, Suite 800 Miami, Florida Telephone: Facsimile: vdiaz(w,podhurst.com jgravanteapodhurst.com Carlos Velasquez, Esq. Carlos Velasquez, P.A. Co-Counselfor Puternman class representatives 101 N. Pine Island Drive, Suite 201 Plantation, Florida Telephone : Facsimile : carlos@ velasquez - law.com Guy Manning, Esq. Campbells Scotia Centre P.O. Box 884 GT, George Town Grand Cayman, KY Cayman Islands Telephone: Facsimile: gmanning_(d campbells.com.ky Jonathan Cohen, Esq. Counsel forinstituto de Prevision Militar & Inverma S.A. Shutts & Bowen LLP 201 South Biscayne Blvd. Miami, Florida Telephone: Facsimile: icoben@shutts-law.com Patrick C. Barthet, Esq. The Barthet Firm Counselfor Gibraltar Bank, F.S.B. 200 South Biscayne Blvd., Suite 1800 Miami, Florida Telephone: Facsimile: pbarthet(d barthet.com Patricia A. Gorham, Esq. Counsel for Merrill Lynch Sutherland, Asbill & Brennan LLP 999 Peachtree Street, N.E., Suite 2300 Atlanta, Georgia Telephone: Facsimile: patricia. orgham cr,sablaw.com Miguel Cordano, Esq. CounselforInstituto de Prevision Militar & Inverma S.A. Courthouse Tower, 25" Floor 44 West Flagler Street Miami, Florida Telephone: Facsimile : inmc@lgplaw.com

40 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 40 of 41 Robert M. Brochin, Esq. Morgan Lewis & Bockius LLP 5300 Wachovia Financial Center 200 South Biscayne Boulevard Miami, Florida Telephone: Facsimile: rbrochin(a),morganlewis.com Richard M. Dunn, Esq. Sherril M. Colombo, Esq. Cozen O'Connor Special Counsel 4410 Wachovia Financial Center 200 South Biscayne Boulevard Miami, Florida Telephone: Facsimile: rdunn(iicozen.com Dennis G. Kainen, Esq. Weisberg and Kainen 1401 Brickell Avenue, Suite 800 Miami, Florida Telephone: Facsimile: Christian R. Bartholomew, Esq. Morgan Lewis & Bockius LLP 1111 Pennsylvania Avenue, NW Washington, DC Telephone: Facsimile: cbartholomew(a)moreanlewis.com Samuel Danon, Esq. Counselfor Sun Trust Bank Hunton & Williams LLP 1111 Brickell Avenue, Suite 2500 Miami, Florida Telephone : Facsimile : sdanon@hunton.com George J. Vila, Esq. Counsel for Manuel Cornide 1221 Brickell Avenue Suite 1020 Miami, Florida Telephone : Facsimile : ivpa( aol.com R. Martin Saenz, Esq. Counsel for Ernesto Apostolo, Maria Elena Castillo de Apostolo and Maria de Castillo (Deceased) The Saenz Law Firm, P.A. 777 Brickell Avenue, Suite 1114 Miami, Florida Telephone: Facsimile: saenzlawfirm@, mail. com

41 Case 1:05-cv KMM Document 378 Entered on FLSD Docket 11/12/2008 Page 41 of 41 Nancy Boscan Calle 89 #14A-44, Sector Delicias Maracaibo, Zulia Venezuela Jose Eguiguren Av. Mariana de Jesus OE-8 y Occidental Centro Medico 2do Piso Ofi. 209 Quito Ecuador Vitaliano Giannangeli Avenida 15 Con Calle 39A # 15N-126 Gables International Equities Corp. Urbanizacion La Picola 2655 Le Jeune Road Maracaibo, Zulia Suite 711 Venezuela Coral Gables, FL Tula Boscan Calle 89 #14A-44 Sector Delicias Maracaibo, Zulia Venezuela

42 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 1 of 10 Exhibit A

43 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 2 of 10 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO.: CIV-MOORE CESAR AGUIRRE URBANEJA, JOSE LUIS ZAMBRANO, MALLIYA SALAZAR, JULIO LEDESMA, FERNANDO QUEVEDO, ENRIQUE LOESER BRAVO, DR. MARTHA LANDIVAR GANTIER, AND FABIO EDUARDO MORENO CHARME, individually and on behalf of all others similarly situated, vs. Plaintiffs, LEHMAN BROTHERS, INC., a New York Corporation; MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., a Delaware Corporation; RAYMOND JAMES FINANCIAL SERVICES, INC., a Florida Corporation; OLIVA INVESTMENT GROUP, INC., a Florida Corporation; SUNTRUST BANKS, INC., a Georgia corporation, HSBC Bank, U.S.A., Luis Cornide, and Robert A. de la Riva, Defendants. DECLARATION OF VICTOR M. DIAZ, JR. IN SUPPORT OF PLAINTIFFS' COUNSEL'S PETITION FOR ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES 1. INTRODUCTION 1. My name is Victor M. Diaz, Jr. I am a partner at Podhurst Orseck, P.A. ("PODHURST"), and l am submitting this Declaration in support ofplaintiffs ' Counsel ' s application for an award of attorneys' fees and reimbursement of expenses in connection with the services rendered to Plaintiffs and the Class in the course ofthe above-captioned litigation (the "Litigation"). 2. I, with my firm, serve as co-counsel for Plaintiffs in this action, along with the law

44 Case 1 : 05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 3 of 10 firm of Kozyak, Tropin & Throckmorton, as well as attorneys Carlos Velasquez, Carmen Cuetos and Rafael Echeverria. 3. The chart attached hereto as Exhibit A contains a summary of the time spent - since the August 10, 2007 Final Fairness Hearing - by the attorneys, law clerks and paralegals of my firm together with the lodestar calculation based on the firm's current billing rates. The chart includes the name of each attorney, law clerk, or paralegal who has worked on the litigation, the hours expended, and their current hourly billing rate. The chart was prepared from contemporaneous, daily time records regularly prepared and maintained by my firm. Time spent in preparing this Declaration in support of my firm's application for fees and reimbursement of expenses and any other time related to billing or periodic time reporting has not been included in this chart summarizing the firms' hours and lodestar. 4. Since August 10, 2007, the firm has expended to date a total of $13, in unreimbursed expenses in connection with the prosecution of this case. The chart attached as Exhibit B breaks down those expenses by category. are reflected in the books and records of the firm. The expenses incurred pertaining to this case These books and records are prepared from expense vouchers and check records prepared in the normal course of business, and are an accurate record of the expenses incurred. II. AMOUNT AND NATURE OF WORK BY PODHURST 5. From August 10, 2007 through October 8, that is, since the last fee award - the firm incurred a total of 1,601 hours on behalf of Plaintiffs and the Class in the Litigation. The total lodestar amount for these attorney, law clerk, and paralegal hours based on the firms' current hourly billing rate is $433,

45 Case 1 : 05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 4 of 10 A. Client Contact 6. My firm's relationship with the Class is not simply through the representation of the Lead Plaintiffs. In fact, we directly represent 728 PFA investors. We are in constant contact with those investors - who comprise a significant part of the Plaintiff Class - and regularly respond to their questions and concerns. Indeed, it is this direct contact with the investor class that has enabled Plaintiff's Counsel to so effectively litigate this case. For example, since August 10, 2007: My firm has sent out four status letters to our direct clients, amounting to a total of 2,912 letters to these South American investors. The letters keep the investor Class members apprised of the details of the Litigation on an ongoing basis, and facilitate communication which helps us address the investors' concerns about the status oftheir investment and the progress ofthese Receivership proceedings. My firm has responded to over 3,149 investor s. Of these, about 2,969 directly involved answering investor questions regarding the proposed settlements. My firm has fielded over 1,000 telephone calls from investors. Through these calls, we have been able to answers direct questions from the investors about the status of the litigation, and the details of the proposed settlements. My firm has spent hours following up on investor inquiries and processing factual evidence provided by them. My firm has spent hours in direct meetings or conferences with investors. B. Continuing Fact Investigation 7. Even after the last Final Fairness Hearing, my firm has continued to spend a great deal of time and effort building this case against the Defendants. Plaintiffs are the victims of a massive

46 Case 1 :05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 5 of 10 fraud, the intricacies of which have taken an enormous amount of time and effort to uncover. Because of the restrictions of the PSLRA and the Court-ordered stay of discovery, virtually all ofthe substantive research in this case has been done through independent factual investigation conducted by Plaintiffs' counsel with documents, third parties, and investors. Below are some examples of my firm's efforts to develop the facts of this case: As discussed above, we have spent significant time meeting and communicating with investors directly. These meetings and communications enabled us to get first hand facts related to the fraud perpetrated on the investors and the damages they sustained. We have spent many hours meeting with co-counsel, counsel for the Receiver, and counsel for various other third parties in efforts to develop the facts of this case. We have worked closely with the Receiver in order to build the case against the Defendants. Since August 10, 2007, my firm participated in the following Steering Committee meetings: a. August 17, 2007; b. October 4, 2007; c. November 7, 2007; d. December 19, 2007; and e. February 19, 2008; f. January 13, During those meetings we met with the Receiver and other members of the Steering Committee to formulate strategy, share information, and otherwise develop the case against the Defendants. On November 27, 2007, we also had an in-depth meeting with the SEC to share information with respect to our parallel cases.

47 Case 1 : 05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 6 of 10 C. Litigation 8. As counsel for Plaintiffs, PODHURST - along with KTT - has been responsible for much of the substantive work in this case. Besides myself, several other attorneys have assisted in this effort, as has support staff. PODHURST attorneys - along with KTT - have drafted and prepared many of the substantive pleadings before this Court, including the several versions of the Complaint and responses to the Defendants' motions to dismiss. Since August 10, 2007: We have spent hours drafting pleadings. We have spent 161 hours reviewing and following up or responding to pleadings filed by Defendants or legal arguments presented by yet, un-named third parties, including the settling third parties. We have spent hours conducting legal research. We have spent 51 hours researching and briefing appellate issues arising out of this case. All of the above work was necessary to enable us to adequately pursue this case against the Defendants on behalf of the Class. III. ADEQUACY OF PODHURST'S REPRESENTATION 9. Attached hereto as Exhibit C is my resume and a resume of the firm, including brief biographies of the principal attorneys who worked on the Litigation. 10. Over the past 22 years my practice has been principally devoted to representing Plaintiffs in a variety of complex civil litigation, in both Federal and State Court. I have served as a court appointed Lead Counsel, Co-Lead Counsel and/or Plaintiffs Steering Committee member in

48 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 7 of 10 five federal cases, including serving as court-appointed Co-Lead counsel in the multi-district proceedings arising out of the recall of U.S. Firestone tires. See In re Bridgestone/Firestone, Inc., MDL No.1373 (S. D. Ind.). During my over two decades of practice, a significant portion of my practice has been devoted to representing clients from Central and South America. As a further example, of our expertise in complex securities fraud litigation, I am currently serving as Co-Lead Counsel in the Mutual Benefits Class Action Litigation pending before Judge Moreno in this District. See Scheck Invs., L.P., et al. v. Kensington Mgmt., Inc., et al., Case No CIV- MORENO/GARBER. 11. The exhaustive investment of PODHURST' s resources had a substantial impact on the firm's ability to take on other large legal assignments. During the three years that this case has been actively litigated, PODHURST was required to forgo or minimize its involvement in many other important, lucrative, and professionally challenging assignments. 12. In large part due to the extensive efforts to maintain the class informed ofthe progress ofthese proceedings and to involve them in the development ofthe terms ofthe pending settlements, I am aware of no objections filed by any class members to any of the proposed settlements or to Plaintiffs' Counsel's fee request. I declare under penalty of perjury that the foregoing is true and correct. Dated : November 2008 LlVictor M. az, Jr.

49 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 8 of 10 EXHIBIT A PODHURST ORSECK, P.A. Summary of Professional and Paraprofessional Time PROFESSIONALS: ATTORNEY'S NAME YEAR LICENSED TOTAL HOURS HOURLY RATE TOTAL FEE R. Josefsberg $ $12, J. Eaton $ $97, V. Diaz, Jr $ $96, J. Gravante $ $70, A. Popowski $ $134, Total Hours by Professionals: 1, Blended Rate for Professionals: $ Total Professional Fees: $412, PARAPROFESSIONALS: LAW CLERK/ PARALEGAL NAME YEAR LICENSED TOTAL HOURS HOURLY RATE TOTAL FEE J. Rodriguez N/A $ $15, C. Wong N/A $ $2, A. Medina N/A $ $2, G. Palacio N/A 1.00 $ $ Total Hours by Paraprofessionals: Total Paraprofessional Fees: $21, GRAND TOTALS: Page 1 of 2

50 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 9 of 10 Total Hours by Professionals and Paraprofessionals: Total Blended Rate for Professionals and Paraprofessionals: $ Total Professional and Paraprofessional Fees: $433, Page 2 of 2

51 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 10 of 10 EXHIBIT B PODHURST ORSECK. P.A. BREAKDOWN OF LITIGATION EXPENSES Expense Total Filing Fee, Public Records Search, Pacer Service $ Federal Express Corp.: Delivery Charges $ Long Distance Telephone Charges $ Westlaw Legal Research $1, Postage $2, Reproduction of Documents $ Facsimile Charges $ Courier Services-Delivery Charges $ Photostats $6, Travel Expenses $87.00 Conference Expense $ Miscellaneous: AT&T Phone Conference Links with South American Clients Miscellaneous- Litigation Graphics (Demonstrative Exhibits) $68.91 $ Total Expenses : $13,138.73

52 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 1 of 8 Exhibit B

53 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 2 of 8 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO.: CIV-MOORE CESAR AGUIRRE URBANEJA, JOSE LUIS ZAMBRANO, MALLIYA SALAZAR, JULIO LEDESMA, FERNANDO QUEVEDO, ENRIQUE LOESER BRAVO, DR. MARTHA LANDIVAR GANTIER, AND FABIO EDUARDO MORENO CHARME, individually and on behalf of all others similarly situated, vs. Plaintiffs, LEHMAN BROTHERS, INC., a New York Corporation ; MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., a Delaware Corporation; RAYMOND JAMES FINANCIAL SERVICES, INC., a Florida Corporation ; OLIVA INVESTMENT GROUP, INC., a Florida Corporation ; SUNTRUST BANKS, INC., a Georgia corporation, HSBC Bank, U.S.A., Luis Cornide, and Robert A. de la Riva, Defendants. DECLARATION OF HARLEY S. TROPIN IN SUPPORT OF PLAINTIFFS' COUNSEL'S PETITION FOR ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES 1. INTRODUCTION 1. My name is Harley S. Tropin. I am a senior partner of Kozyak Tropin and Throckmorton, P.A. ("KT&T "). I submit this declaration in support of KT&T' s application for an award of attorneys' fees and reimbursement of expenses in connection with the services rendered to Plaintiffs and the Class in the course of the above-captioned litigation as it relates to Defendants Lehman Brothers, Raymond James Financial Services, and Olivia Investment Group, and third parties Ocean Bank, Rasco, Reininger, Perez, Esquenazi & Vigil, P.L., Bermudez, Tome & Haralson

54 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 3 of 8 LLP and Paul Haralson, Esq., and Haralson ' s insurer, Medmarc Casualty Insurance Company. 2. I, with my firm, serve as counsel for Plaintiffs in this action, along with the law firm of Podhurst, Orseck. My declaration submitted in support of the HSBC settlement (DE ) sets forth in detail my qualifications and those of my firm, the tasks we have performed in this litigation, our exhaustive efforts to keep investors apprised of the progress of this litigation and of the details of settlements, our extensive factual investigation, the complex substantive legal work we have performed, and the risk and opportunity cost involved in prosecuting a case such as this. I will not repeat that material here, but incorporate my previous declaration in full. I submit this declaration for purposes of detailing the time, fees, and expenses incurred by my firm since the last fee award. 3. The chart attached hereto as Exhibit A contains a summary of the time spent by the attorneys, law clerks and paralegals of my firm since the last fee award, together with the lodestar calculation based on the firm 's current billing rates. The chart includes the name of each attorney, law clerk, or paralegal who has worked on the litigation, the hours expended, and their current hourly billing rate. The chart was prepared from contemporaneous, daily time records regularly prepared and maintained by my firm. Time spent in preparing this declaration in support of my firm's application for fees and reimbursement of expenses and any other time related to billing or periodic time reporting has not been included in this chart summarizing the firm's hours and lodestar. 4. From July 30, 2007 through October 17, 2008, the firm incurred a total of 1,047.9 hours on behalf of Plaintiffs and the Class in the litigation. The total lodestar amount for these attorney, law clerk and paralegal hours based on the firm's current hourly billing rates is $411, Of course, this amount does not account for the fact that none of this time has been compensated, nor is there any interest component for the time this amount has been outstanding. 2

55 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 4 of 8 5. Between July 13, 2007, and October 17, 2008 the firm expended $18, in unreimbursed expenses in connection with the prosecution of this case. The chart attached as Exhibit B breaks down those expenses by category. are reflected in the books and records of the firm. The expenses incurred pertaining to this case These books and records are prepared from expense vouchers and check records prepared in the normal course of business, and are an accurate record of the expenses incurred. I declare under penalty of perjury that the foregoing is true and correct. Dated: November 11, L D- A I - Harley S. Tropin, Esq

56 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 5 of 8 EXHIBIT A

57 Case 1:05-cv KMM Document Entered on FLSD Docket 11/12/2008 Page 6 of 8 PROFESSIONALS: ATTORNEY'S NAME EXHIBIT A KOZYAK TROPIN AND THROCKMORTON, P.A. Summary of Professional and Paraprofessional Time YEAR LICENSED TOTAL HOURS HOURLY RATE TOTAL FEE H. Tropin $ $165, T. Ronzetti $ $5, D. Milian $ $89, D. Buckner $ $56, D. Buckner $ $29, M. Schwager $ $32, A. Bokor $ $11, C. Noel $ $1, Subtotals : $ 392, PARAPROFESSIONALS: PARALEGAL'S NAME YEAR LICENSED TOTAL HOURS HOURLY RATE TOTAL FEE Y. Castro N/A 76.4 $ $11, M. Mendez N/A 47.9 $ $7, M. Lissabet N/A 8.8 $ $1, S. Frew N/A 0.2 $ $20.00 Subtotals : $19, TOTALS: Total Hours By Professionals and Paraprofessionals: Total Professionals and Paraprofessionals Fees : $