Case 1:15-cv LLS Document 82 Filed 06/29/18 Page 1 of 2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK. Defendants.

Transcription

1 Case 1:15-cv LLS Document 82 Filed 06/29/18 Page 1 of 2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, v. Plaintiffs, RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Docket No.: 1:15-cv LLS Hon. Louis L. Stanton PLAINTIFFS NOTICE OF MOTION AND MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND PLAN OF ALLOCATION OF SETTLEMENT PROCEEDS Defendants. TO: All Counsel of Record PLEASE TAKE NOTICE that, pursuant to the Court's April 3, 2018 Order Preliminarily Approving Settlement (ECF No. 81) (the Court's Preliminary Approval Order ), on August 3, 2018, at 12:00 p.m. in Courtroom 21C at the United States District Court for the Southern District of New York, Daniel Patrick Moynihan Courthouse, 500 Pearl St., New York, NY 10007, the Honorable Louis L. Stanton, presiding, Plaintiffs Douglas Drees and Allen Altman ( Plaintiffs ) will and hereby do move for final approval of the proposed class action Settlement and for approval of the proposed Plan of Allocation. This motion is based upon the Memorandum of Law in Support of Plaintiffs Motion for Final Approval of Class Action Settlement and Plan of Allocation of Settlement Proceeds; the Declarations of Nicholas I. Porritt, Alexander Villanova, Douglas Drees, and Allen Altman; the record and proceedings in this Action; and such matters as the Court may consider at the time of the hearing. 1

2 Case 1:15-cv LLS Document 82 Filed 06/29/18 Page 2 of 2 DATED: June 29, 2018 Respectfully submitted, By: /s/ Adam Apton. Nicholas I. Porritt Adam M. Apton LEVI & KORSINSKY, LLP 30 Broad Street, 24th Floor New York, New York Telephone: (212) Facsimile: (212) Attorneys for Plaintiffs Douglas Drees and Allen Altman and Lead Counsel for the Class 2

3 Case 1:15-cv LLS Document 82-1 Filed 06/29/18 Page 1 of 8 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, v. Plaintiffs, RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Defendants. Docket No.: 1:15-cv LLS Hon. Louis L. Stanton [PROPOSED] FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE WHEREAS, this matter came before the Court for hearing pursuant to an Order of this Court, dated April 3, 2018, on the application of Plaintiffs Douglas Drees and Allen Altman ( Plaintiffs ) and the Defendants for approval of the Settlement set forth in the Stipulation of Settlement, dated as of February 5, 2018: (A) Pursuant to the Preliminary Approval Order entered on April 3, 2018, this Court scheduled a Settlement Hearing for August 3, 2013, at 12:00 p.m., to determine, inter alia, whether the proposed Settlement, Plan of Allocation, and requests for Lead Counsel s fees and expenses and Plaintiffs incentive awards are fair, reasonable, and adequate, and should be approved by the Court (the Settlement Hearing ); (B) The Court has received affidavit(s) and/or declaration(s) attesting to compliance with the terms of the Preliminary Approval Order, including the mailing of the Notice and publication of the Publication Notice; (C) Due to adequate notice having been given to the Class as required by the Preliminary Approval Order, and the Court having held a Settlement Hearing on August 3, 2018, 1

4 Case 1:15-cv LLS Document 82-1 Filed 06/29/18 Page 2 of 8 and the Court having considered all papers filed and proceedings in this Litigation and otherwise being fully informed of the matters herein, and for the reasons stated on the record on August 3, 2018, and good cause appearing, NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED: 1. The provisions of the Stipulation, including definitions of the terms used therein, are hereby incorporated by reference as though fully set forth herein. All capitalized terms used herein have the meanings set forth and defined in the Stipulation. 2. This Court has jurisdiction over the subject matter of this Litigation and over all parties to this Action, including all Class Members. 3. Except as to any individual or entity who has validly and timely requested exclusion from the Settlement (identified in Exhibit A attached hereto), Plaintiffs and all members of the Settlement Class are bound by this Order and Final Judgment (the Judgment ). 4. This Court finds that the distribution of the Notice (including the Summary Notice and Supplemental Notice), and the notice methodology, all of which were implemented in accordance with the terms of the Stipulation and the Court s Preliminary Approval Order: (a) Constituted the best practicable notice to Settlement Class Members under the circumstances of this Action; (b) Were reasonably calculated, under the circumstances, to apprise the Settlement Class of: (i) the proposed Settlement of this Litigation; (ii) their right to exclude themselves from the Class; (iii) their right to object to any aspect of the proposed Settlement; (iv) their right to appear at the Settlement Hearing, either on their own or through counsel hired at their own expense, if they did not exclude themselves from the 2

5 Case 1:15-cv LLS Document 82-1 Filed 06/29/18 Page 3 of 8 Class; and (v) the binding effect of the proceedings, rulings, orders, and judgments in this Action, whether favorable or unfavorable, on all persons not excluded from the Class; (c) Were reasonable, fair, and constituted due, adequate, and sufficient notice to all persons entitled to be provided with notice; and (d) Fully satisfied all applicable requirements of the Federal Rules of Civil Procedure (including Rules 23(c) and (d)), the United States Constitution (including the Due Process Clause), the Securities Exchange Act of 1934, 15 U.S.C. 78u-4(a)(7), the Private Securities Litigation Reform Act of 1995, the Rules of Court, and any other applicable law. 5. The terms and provisions of the Stipulation were negotiated by the parties at arm s length and were entered into by the parties in good faith. 6. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court finds that the Settlement set forth in the Stipulation is fair, reasonable, and adequate as to all members of the Class, and in the best interests of the Class taking into account, inter alia, the benefits to the Class; the complexity, expense, and possible duration of further litigation; the risks of establishing liability and damages; and the costs of continued litigation. 7. The Settlement set forth in the Stipulation is hereby finally approved as fair, reasonable, and adequate in all respects, in accordance with the terms and provisions therein, and Plaintiffs and members of the Class, and all and each of them, are hereby bound by the terms of the Settlement as set forth in the Stipulation. 8. The Plan of Allocation, as described in the Notice and Publication Notice, is hereby approved as fair, reasonable and adequate. Any order, proceeding, appeal, modification or change 3

6 Case 1:15-cv LLS Document 82-1 Filed 06/29/18 Page 4 of 8 relating to the Plan of Allocation or the Fee and Expense Award shall in no way disturb or affect the finality of this Judgment, and shall be considered separate from this Judgment. 9. Upon the Effective Date, the Releasing Persons, and any other person or entity who has the right, ability, standing, or capacity to assert, prosecute, or maintain on behalf of any member of the Settlement Class any of the Released Claims (or to obtain the proceeds of any recovery therefrom) shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, discharged, and dismissed (i) all Released Claims (including Unknown Claims) against the Released Persons, whether or not such member of the Settlement Class executes and delivers a Proof of Claim and Release form, seeks or obtains a distribution from the Net Settlement Fund, is entitled to receive a distribution under the Plan of Allocation approved by the Court, or has objected to the Settlement, the Plan of Allocation, or Plaintiffs Fee and Expense Award, as well as (ii) any claims arising out of, relating to, or in connection with the defense, settlement, or resolution of the Litigation or the Released Claims; provided, however, that nothing herein shall in any way restrict or impair the rights of any Settling Party to enforce the terms of the Stipulation and Settlement. Upon the Effective Date, and without any further action, the Plaintiffs further agree not to knowingly and voluntarily assist in any way any third party in commencing or prosecuting any suit against the Released Persons relating to any Released Claim, except as required by law. 10. Upon the Effective Date, Releasing Persons, and any other person or entity who has the right, ability, standing, or capacity to assert, prosecute, or maintain on behalf of any member of the Settlement Class any of the Released Claims (or to obtain the proceeds of any recovery therefrom) are forever barred and enjoined from commencing, instituting, or continuing to prosecute any action or proceeding in any court of law or equity, arbitration tribunal, 4

7 Case 1:15-cv LLS Document 82-1 Filed 06/29/18 Page 5 of 8 administrative forum, or other forum of any kind, asserting any of the Released Claims (including Unknown Claims) against any of the Released Persons, as well as any claims arising out of, relating to, or in connection with the defense, settlement or resolution of the Litigation or the Released Claims; provided, however, that nothing herein shall in any way restrict or impair the rights of any Settling Party to enforce the terms of the Stipulation and Settlement. 11. Upon the Effective Date, Defendants, on behalf of themselves, and their heirs, executors, trustees, administrators, predecessors, successors, and assigns, for good and valuable consideration the receipt and adequacy of which is hereby acknowledged, shall fully, finally, and forever release, relinquish, and discharge any and all Released Persons Claims against each and every one of the Releasing Persons, and shall forever be barred and enjoined, without the necessity of any of the Releasing Persons, posting a bond, from commencing, instituting, prosecuting, or maintaining any of the Released Persons Claims against any of the Releasing Persons. 12. In accordance with 15 U.S.C. 78u-4(f)(7), claims for contribution arising out of any Released Claim, including, but not limited to, any claims that arise out of the Litigation (i) by any Person against a Released Person, and (ii) by any Released Person against any Person other than as set out in 15 U.S.C. 78u-4(f)(7)(A)(ii) are hereby permanently barred, extinguished, discharged, satisfied, and unenforceable. 13. Any plan of allocation submitted by Plaintiffs or any other order entered regarding Lead Counsel s Fee and Expense Award shall in no way disturb or affect this Judgment and shall be considered separate from this Judgment. 14. Neither the Stipulation nor the Settlement contained therein, nor any act performed or document executed pursuant to or in furtherance of the Stipulation or the Settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the validity of any 5

8 Case 1:15-cv LLS Document 82-1 Filed 06/29/18 Page 6 of 8 Released Claims, or of any wrongdoing or liability of the Defendants; or (b) is or may be deemed to be or may be used as an admission of, or evidence of, any fault or omission of any of the Defendants in any civil, criminal, or administrative proceeding in any court, administrative agency or other tribunal. Defendants may file the Stipulation and/or this Judgment in any other action that may be brought against them in order to support a defense or counterclaim based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction or any other theory of claim preclusion or similar defense or counterclaim. 15. Without affecting the finality of this Judgment in any way, this Court hereby retains continuing jurisdiction over (a) implementation of this Settlement and any award or distribution of the Settlement Fund, including interest earned thereon; (b) disposition of the Settlement Fund; (c) hearing and determining applications for attorneys fees and expenses in the Litigation; and (d) all parties hereto for the purpose of construing, enforcing, and administering the Stipulation. 16. The Court finds that during the course of the Litigation, Plaintiffs and Defendants, and their respective counsel at all times complied with the requirements of Federal Rule of Civil Procedure In the event that the Settlement does not become effective in accordance with the terms of the Stipulation or the Effective Date does not occur, or in the event that the Settlement Fund, or any portion thereof, is returned to the Defendants, then this Judgment shall be rendered null and void to the extent provided by and in accordance with the Stipulation and shall be vacated and, in such event, all orders entered and releases delivered in connection herewith shall be null and void to the extent provided by and in accordance with the Stipulation. 18. This Litigation is dismissed with prejudice. The parties are to bear their own costs, except as otherwise provided in the Stipulation or this Judgment. 6

9 Case 1:15-cv LLS Document 82-1 Filed 06/29/18 Page 7 of The provisions of this Judgment constitute a full and complete adjudication of the matters considered and adjudged herein, and the Court determines that there is no just reason for delay in the entry of this Judgment. The Clerk is hereby directed to immediately enter this Judgment. SO ORDERED in the Southern District of New York on, HON. LOUIS L. STANTON UNITED STATES DISTRICT JUDGE 7

10 Case 1:15-cv LLS Document 82-1 Filed 06/29/18 Page 8 of 8 No exclusions. EXHIBIT A 1

11 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 1 of 21 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, v. Plaintiffs, RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Docket No.: 1:15-cv LLS Hon. Louis L. Stanton Date: August 3, 2018 Time: 12:00 p.m. Courtroom: 21C Defendants. PLAINTIFFS MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND PLAN OF ALLOCATION OF SETTLEMENT PROCEEDS Nicholas I. Porritt Adam M. Apton LEVI & KORSINSKY, LLP th Street NW, Suite 115 Washington, DC Telephone: Facsimile: Attorneys for Plaintiffs Douglas Drees and Allen Altman and Lead Counsel for the Class

12 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 2 of 21 TABLE OF CONTENTS I. INTRODUCTION... 1 II. ARGUMENT... 2 A. The Proposed Settlement Warrants Final Approval The Settlement was Reached after Arm s Length Negotiations with the Assistance of an Experienced Mediator The Application of the Grinnell Factors Supports Approval of the Settlement as Fair, Reasonable, and Adequate... 4 B. The Plan of Allocation is Fair, Reasonable, and Adequate C. Notice to the Class Satisfies the Requirements of Rule 23, Due Process, and the PSLRA III. CONCLUSION i

13 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 3 of 21 Cases TABLE OF AUTHORITIES In re Am. Bank Note Holographics, Inc. Sec. Litig., 127 F. Supp. 2d 418 (S.D.N.Y. 2001) In re AOL Time Warner, Inc. Sec. and ERISA Litig., No. 02 Civ. 5575, 2006 WL (S.D.N.Y. Apr. 6, 2006)... 4, 7 Arace v. Thompson, No. 08 Civ. 7905, 2011 WL (S.D.N.Y. Aug. 17, 2011) In re Austrian & German Bank Holocaust Litig., 80 F. Supp. 2d 164, 176 (S.D.N.Y. 2000)... 7 In re Bank of Am. Corp. Sec., Derivative and ERISA Litig., 772 F.3d 125 (2d Cir. 2014) Bellifemine v. Sanofi-Aventis U.S. LLC, No. 07 Civ. 2207, 2010 WL (S.D.N.Y. Aug. 6, 2010)... 7 In re Bisys Sec. Litig., No. 04 Civ 3840 (JSR), 2007 WL (S.D.N.Y. July 16, 2007)... 6 In re Chambers Dev. Sec. Litig., 912 F. Supp. 822 (W.D. Pa. 1995) Chavarria v. N.Y. Airport Serv., LLC, 875 F. Supp. 2d 164, 171 (E.D.N.Y. 2012)... 2, 12, 14 In re China Sunergy Sec. Litig., No. 07-CV-7895, 2011 WL (S.D.N.Y. May 13, 2011)... 3 In re Citigroup Inc. Bond Litig., 296 F.R.D. 147 (S.D.N.Y. 2013)... 6 D Amato v. Deutsche Bank, 236 F.3d 78 (2d Cir. 2001)... 2, 3, 4 In re Datatec Sys., Inc. Sec. Litig., No. 04-CV-525, 2007 WL (D.N.J. Nov. 28, 2007) Davis v. J.P. Morgan Chase & Co., 827 F. Supp. 2d 172 (W.D.N.Y. 2011)... 7 Flores v. Anjost Corp., No. 11 Civ. 1531, 2014 WL (S.D.N.Y. Jan. 29, 2014)... 2 In re Gen. Instrument Sec. Litig., 209 F. Supp. 2d 423 (E.D. Pa. 2001) In re Giant Interactive Group, Inc. Sec. Litig., 279 F.R.D. 151 (S.D.N.Y. 2011)... 4, 10 ii

14 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 4 of 21 In re Gilat Satellite Networks, Ltd., No. CV , 2007 WL (E.D.N.Y. Apr. 19, 2007)... 5 In re Global Crossing Sec. and ERISA Litig., 225 F.R.D. 436, (S.D.N.Y. 2004)... 10, 14 Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000)... 3 In re IMAX Sec. Litig., 283 F.R.D. 178 (S.D.N.Y. 2012)... 5 Khait v. Whirlpool Corp., No , 2010 WL (E.D.N.Y. Jan. 20, 2010)... 3, 7, 8 In re Luxottica Grp. S.p.A. Sec. Litig., 233 F.R.D. 306 (E.D.N.Y. 2006)... 3, 5 Maley v. Del Global Techs. Corp., 186 F. Supp. 2d 358 (S.D.N.Y. 2002) In re Marsh ERISA Litig., 265 F.R.D. 128 (S.D.N.Y. 2010)... 3 In re Metlife Demutualization Litig., 689 F. Supp. 2d 297 (E.D.N.Y. 2010) Newman v. Stein, 464 F.2d 689 (2d Cir. 1972)... 3 In re Nissan Radiator/Transmission Cooler Litig., No. 10-cv-7493, 2013 WL (S.D.N.Y. May 30, 2013)... 7 Padro v. Astrue, No. 11-cv-1788, 2013 WL (E.D.N.Y. Oct. 18, 2013)... 5, 15 In re PaineWebber Ltd. P ships Litig., 171 F.R.D. 104 (S.D.N.Y. 1997)... 3 In re Priceline.com, Inc. Sec. Litig., No. 00-cv- 1884, 2007 WL (D. Conn. July 20, 2007)... 4 In re Sinus Buster Prods. Consumer Litig., No. 12-CV-2429, 2014 WL (E.D.N.Y. Nov. 10, 2014)... 7 In re Veeco Instruments Inc. Sec. Litig., No. 05 MDL 01695, 2007 WL (S.D.N.Y. Nov. 7, 2007)... 13, 14 In re Visa Check/Mastermoney Antitrust Litig., 297 F. Supp. 2d 503 (E.D.N.Y. 2003) Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005)... 1, 2 iii

15 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 5 of 21 Willix v. Healthfirst, Inc., No. 07 Civ. 1143, 2011 WL (E.D.N.Y. Feb. 18, 2011)... 7 In re WorldCom, Inc. Sec. Litig., 388 F. Supp. 2d 319 (S.D.N.Y. 2005) Rules Fed. R. Civ. P , 14, 17 iv

16 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 6 of 21 Pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, Plaintiffs Douglas Drees and Allen Altman ( Plaintiffs ), respectfully submit this memorandum of law in support of their motion for final approval of the class action Settlement and approval of the proposed plan for allocating the Net Settlement Fund. 1 I. INTRODUCTION The Court should approve the proposed Settlement because it is an extraordinary result for the Class. Following almost three years of hard-fought litigation and negotiation, Plaintiffs secured a cash payment of $9,500,000 in exchange for the release of all claims arising from this Action. This amount equates to nearly 17% of total class-wide damages. Considering the fact that the median percentage of settlements in cases of this size is between 5% and 8%, Plaintiffs results are truly exceptional for the Class. In the Second Circuit, [a] court may approve a class action settlement if it is fair, adequate, and reasonable, and not a product of collusion. Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 116 (2d Cir. 2005) (internal quotations omitted). Each of those factors is present here. Plaintiffs performed an in-depth investigation to obtain detailed facts in support of their claims against Defendants. They defeated a motion to dismiss the complaint under Rule 12(b)(6), conducted party and non-party discovery, obtained class certification, and participated in arm s length mediation. Only after developing a thorough understanding of the strengths and weaknesses of their claims did Plaintiffs agree to the proposed Settlement. In their judgment (with the advice of counsel), the risks and rewards of further litigation weighed heavily in favor of settling this case under the terms presently before the Court. If approved, the Net Settlement Fund will be distributed fairly between Class Members in accordance with the proposed Plan of Allocation. The Plan of Allocation is simple to understand and easy to administer (thereby saving money in the form of costs charged by the Claims 1 Unless otherwise noted, capitalized terms have the meanings set forth in the Stipulation of Settlement dated February 5, 2018 (Dkt. No. 78) (the Settlement or the Stipulation ). 1

17 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 7 of 21 Administrator). Class Members will receive a pro rata share of the Net Settlement Fund determined by the number of shares they held at the end of the Class Period. The amount of money ultimately distributed to these Class Members will depend on the number of Class Members who submit timely claims. For the reasons set forth below, Plaintiffs respectfully request that the Court grant their motion in its entirety and approve the Settlement and Plan of Allocation in final. II. ARGUMENT A. The Proposed Settlement Warrants Final Approval. Under Federal Rule of Civil Procedure Section 23(e), a class action settlement should be approved if the Court finds it fair, reasonable, and adequate. A court determines a settlement s fairness by looking at both the settlement s terms and the negotiating process leading to settlement. Wal-Mart, 396 F.3d at 116; see also D Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001) ( The District Court must carefully scrutinize the settlement to ensure its fairness, adequacy and reasonableness, and that it was not a product of collusion. ). In this Circuit, public policy favors the settlement of disputed claims among private litigants, particularly in complex class actions such as this one. Wal-Mart, 396 F.3d at 116 ( We are mindful of the strong judicial policy in favor of settlements, particularly in the class action context. ); Chavarria v. N.Y. Airport Serv., LLC, 875 F. Supp. 2d 164, 171 (E.D.N.Y. 2012) ( Settlement approval is within the Court s discretion, which should be exercised in light of the general judicial policy favoring settlement. ). Courts examine procedural and substantive fairness in light of the strong judicial policy favoring settlements of class action suits. Flores v. Anjost Corp., No. 11 Civ. 1531, 2014 WL , at *4 (S.D.N.Y. Jan. 29, 2014) (quoting Wal-Mart, 396 F.3d at 116). Recognizing that a settlement represents an exercise of judgment by the negotiating parties, the Second Circuit has cautioned that, while a court should not give rubber stamp approval to a proposed settlement, it should stop short of the detailed and thorough investigation that it would undertake if it were actually trying the case. Detroit v. Grinnell Corp., 495 F.2d 448, 462 (2d Cir. 1974), abrogated on other grounds by, Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2

18 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 8 of ). Because [t]he very purpose of a compromise is to avoid the trial of sharply disputed issues and to dispense with wasteful litigation, the court must not turn the settlement hearing into a trial or a rehearsal of the trial. Newman v. Stein, 464 F.2d 689, (2d Cir. 1972); see Chavarria, 875 F. Supp. 2d at 172 (a court may not conduct a mini-trial of the merits of the action. ); In re Marsh ERISA Litig., 265 F.R.D. 128, 138 (S.D.N.Y. 2010) ( In deciding whether to approve a settlement, a court should not attempt to approximate a litigated determination of the merits of the case lest the process of determining whether to approve a settlement simply substitute[s] one complex, time consuming and expensive litigation for another. ). 1. The Settlement was Reached after Arm s Length Negotiations with the Assistance of an Experienced Mediator. A strong initial presumption of fairness attaches to a proposed settlement if it is reached by experienced counsel after arm s-length negotiations; and great weight is accorded to the recommendations of counsel, who are closely acquainted with the facts of the underlying litigation. See, e.g., Khait v. Whirlpool Corp., No , 2010 WL , at *3 (E.D.N.Y. Jan. 20, 2010); In re Luxottica Grp. S.p.A. Sec. Litig., 233 F.R.D. 306, 315 (E.D.N.Y. 2006). A court may find the negotiating process is fair where, as here, the settlement resulted from arm s-length negotiations and that plaintiffs counsel have possessed the experience and ability... necessary to effective representation of the class s interests. D Amato, 236 F.3d at 85; In re China Sunergy Sec. Litig., No. 07-CV-7895, 2011 WL , at **3-4 (S.D.N.Y. May 13, 2011); In re PaineWebber Ltd. P ships Litig., 171 F.R.D. 104, 125 (S.D.N.Y. 1997) ( So long as the integrity of the arm s length negotiation process is preserved... a strong initial presumption of fairness attaches to the proposed settlement. ), aff d, 117 F.3d 721 (2d Cir. 1997). The initial presumption of fairness and adequacy applies here because all of the parties are represented by counsel with extensive experience litigating these types of claims (Porritt Decl. 70, 73); the Settlement was the result of arm s-length negotiations (id. at 4, 16, 28); and the parties understood the strengths and weaknesses of the claims and defenses before the Settlement was reached (Porritt Decl ). 3

19 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 9 of 21 The Settlement was also reached with assistance of an experienced mediator, Robert A. Meyer, Esq. Mr. Meyer oversaw the mediation that resulted in the Settlement after issuing a mediator s proposal. The active involvement of an experienced independent mediator is strong evidence of the absence of collusion and further supports the presumption of fairness. See, e.g., In re Priceline.com, Inc. Sec. Litig., No. 00-cv- 1884, 2007 WL , at *3 (D. Conn. July 20, 2007) ( The settlement in this case was ably negotiated at arms length with the impartial participation of Judge Politan and attorney [Robert] Meyer and is, therefore, entitled to a presumption of fairness and adequacy. ); see also D Amato, 236 F.3d at 85 (a mediator s involvement in settlement negotiations helps to ensure that the proceedings were free of collusion and undue pressure ); In re Giant Interactive Grp., Inc. Sec. Litig., 279 F.R.D. 151, 160 (S.D.N.Y. 2011) (parties were entitled to a presumption of fairness where mediator facilitated arms-length negotiations); In re AOL Time Warner, Inc. Sec. and ERISA Litig., No. 02 Civ. 5575, 2006 WL , at *7 (S.D.N.Y. Apr. 6, 2006) (noting that involvement of mediator in pre-certification settlement negotiations helped ensure that the proceedings were free of collusion and undue pressure ). 2. The Application of the Grinnell Factors Supports Approval of the Settlement as Fair, Reasonable, and Adequate This Settlement is also substantively fair, reasonable and adequate and in the best interests of the Class. In the Second Circuit, the following factors are to be considered in evaluating a class action settlement: (1) the complexity, expense and likely duration of the litigation, (2) the reaction of the class to the settlement, (3) the stage of the proceedings and the amount of discovery completed, (4) the risks of establishing liability, (5) the risks of establishing damages, (6) the risks of maintaining the class action through the trial, (7) the ability of the defendants to withstand a greater judgment, (8) the range of reasonableness of the settlement fund in light of the best possible recovery, [and] (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation. Grinnell, 495 F.2d at 463 (internal citations omitted); see also McReynolds v. Richards-Cantave, 588 F.3d 790, 804 (2d Cir. 2009); Wal-Mart, 396 F.3d at 117. A court need not find that every 4

20 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 10 of 21 factor militates in favor of a finding of fairness; rather, a court considers the totality of these factors in light of the particular circumstances. Padro v. Astrue, No. 11-cv-1788, 2013 WL , at *4 (E.D.N.Y. Oct. 18, 2013) (citation omitted). Here, the Settlement easily satisfies the Grinnell factors. a) The Complexity, Expense and Likely Duration of the Litigation Support Approval of the Settlement. In evaluating the settlement of a securities class action, federal courts, including this Court, have long recognized that such litigation is notably difficult and notoriously uncertain. In re IMAX Sec. Litig., 283 F.R.D. 178, 189 (S.D.N.Y. 2012) (citation omitted). Indeed, courts recognize that [s]ecurities class actions are generally complex and expensive to prosecute. In re Gilat Satellite Networks, Ltd., No. CV , 2007 WL , at *10 (E.D.N.Y. Apr. 19, 2007). Accordingly, [c]lass action suits readily lend themselves to compromise because of the difficulties of proof, the uncertainties of the outcome, and the typical length of the litigation. Luxottica, 233 F.R.D. at 310. Litigation of the claims alleged in this case raised a number of complex questions that required substantial efforts by Plaintiffs. As discussed below and in the Porritt Declaration, Plaintiffs would have had to overcome numerous hurdles in order to achieve a litigated verdict in this Action against Defendants. Even assuming that the sustained claims survived summary judgment, a jury trial would have required a substantial amount of factual and expert testimony. Whatever the outcome at trial, an appeal likely would have been taken. All of the foregoing would have posed considerable expense to the parties, and would have delayed any financial recovery for several years, assuming that Plaintiffs ultimately succeeded on their claims. Accordingly, the complexity, expense, and likely duration of the litigation support approval of the Settlement as fair and reasonable. b) The Reaction of the Class Supports Approval of the Settlement. It is well-settled that the reaction of the class to the settlement is perhaps the most significant factor to be weighed in considering its adequacy. See, e.g., Chavarria, 875 F. Supp. 5

21 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 11 of 21 2d at 173; see also Padro, 2013 WL , at *5 ( The fact that a small number of objections were received weighs in favor of settlement, as does the positive reaction of the class, particularly in light of its size. ). In accordance with the Court s Preliminary Approval Order, the Court-approved Claims Administrator, Epiq Class Action & Claims Solutions, Inc. ( Epiq ), began mailing copies of the Notice to potential members of the Class and their brokers and nominees on April 17, 2018 (the Notice Date ). See Declaration of Alexander Villanova ( Villanova Decl. ), at 5. As of June 26, 2018, an aggregate of 52,185 copies of the Notice have been disseminated to potential Class Members and their brokers and nominees. Id. 7. In addition, the Notice was published over the PR Newswire on April 17, 2018, and the Notice and related settlement documents are available on a website specifically created for the Settlement, Id. at 8, 15. The Notice set out the essential terms of the Settlement and informed potential Class Members of, among other things, their right to opt out of the Class or object to any aspect of the Settlement, as well as the procedure for submitting Claim Forms. While the deadline set by the Court for Class Members to opt out or object to the Settlement, July 5, 2018 and July 13, 2018, respectively, has not yet passed, to date, Lead Counsel has received only one objection and no requests for exclusion. Id. at 16, 17. To the extent this objection or any others remain pending (i.e., they are not withdrawn), Plaintiffs will respond to them in accordance with the deadline set by the Court s Preliminary Approval Order. The small number of objections (i.e., only one) weighs in favor of approving the Settlement. See, e.g., In re Citigroup Inc. Bond Litig., 296 F.R.D. 147, 156 (S.D.N.Y. 2013) (the reaction of the class supported the settlement where not one of the objections or requests for exclusion was submitted by an institutional investor ); AOL Time Warner, 2006 WL , at *10 (the lack of objections from institutional investors supported approval of settlement); In re Bisys Sec. Litig., No. 04 Civ 3840 (JSR), 2007 WL , at *1 (S.D.N.Y. July 16, 2007) (noting that only one individual raised any objection, even though the class included numerous institutional investors who presumably had the means, the motive, and the sophistication to raise 6

22 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 12 of 21 objections if they thought the [requested] fee was excessive ); Davis v. J.P. Morgan Chase & Co., 827 F. Supp. 2d 172, 177 (W.D.N.Y. 2011) (granting final approval and noting very little negative reaction by class members to the proposed settlement where 11 out of 3,800 class members opted out, and 3 objected); Willix v. Healthfirst, Inc., No. 07 Civ. 1143, 2011 WL , at * 4 (E.D.N.Y. Feb. 18, 2011) (granting final approval of the settlement where 7 out of 2,025 class members objected and 2 opted out); Bellifemine v. Sanofi-Aventis U.S. LLC, No. 07 Civ. 2207, 2010 WL , at * 3 (S.D.N.Y. Aug. 6, 2010) (granting final approval where there were no objections but 28 of 5,262 opted out, noting that [a] small number of objections is convincing evidence of strong support by class members ). The deadlines for submitting exclusion and objection is July 5, 2018 and July 13, 2018, respectively. Plaintiffs will address all objections, to the extent they are not withdrawn, in accordance with the Court s Preliminary Approval Order. c) The Stage of the Proceedings Supports Approval of the Settlement. Under this factor the relevant inquiry is whether the plaintiffs have obtained a sufficient understanding of the case to gauge the strengths and weaknesses of their claims and the adequacy of the settlement. In re Sinus Buster Prods. Consumer Litig., No. 12-CV-2429, 2014 WL , at *9 (E.D.N.Y. Nov. 10, 2014) (quoting AOL Time Warner, 2006 WL , at *10). The pertinent question is whether counsel had an adequate appreciation of the merits of the case before negotiating. Whirlpool, 2010 WL , at *6. The parties need not have engaged in extensive discovery as long as they have engaged in sufficient investigation of the facts to enable the Court to intelligently make an appraisal of the settlement. AOL Time Warner, 2006 WL , at *10 (quoting In re Austrian & German Bank Holocaust Litig., 80 F. Supp. 2d 164, 176 (S.D.N.Y. 2000)); see also In re Nissan Radiator/Transmission Cooler Litig., No. 10-cv-7493, 2013 WL , at *7 (S.D.N.Y. May 30, 2013) (finding the factor to weigh in favor of approval even where the parties have not engaged in extensive discovery but after plaintiffs conducted an investigation prior to commencing the action and also consulted with experts concerning their 7

23 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 13 of 21 claims). Here, the successful resolution of the case occurred after almost three years of litigation and extensive discovery. As set forth in greater detail in the Porritt Declaration, Plaintiffs extensively developed the record by, among other things: Performing an in-depth review and analysis of (a) Resource Capital s SEC filings; (b) research reports by securities and financial analysts; (c) transcripts of Resource Capital s earnings conference calls and industry conferences; (d) Resource Capital s press releases; (e) news and media reports concerning Resource Capital and other facts related to this action; and (f) data reflecting the pricing of Resource Capital s securities. Conferring extensively with experts and consultants concerning the specialized issues in the case, including the market for Resource Capital s securities, real estate financing, and troubled debt restructurings; Conducting months of discovery, including propounding and responding to multiple discovery requests, producing and reviewing internal documents from Resource Capital relating to the creditworthiness of the mezzanine loan at issue in this case, and issuing non-party subpoenas to entities around the country; Reviewing 119,887 pages of documents produced from Resource Capital alone and 51,139 pages of documents from half a dozen additional non-parties, including Moody s, Fitch Ratings, Blackstone, and Grant Thornton LLP; and Taking and defending expert and party depositions in connection with Plaintiffs successful bid for class certification. Porritt Decl. at 68. Thus, at the time the Settlement was reached, Plaintiffs had obtained sufficient information to be able to intelligently assess the strengths and weaknesses of the case and appraise settlement proposals. Padro, 2013 WL , at *6; see also Whirlpool, 2010 WL , at *6 (finding factor supported settlement where the parties informally exchanged information and participated in mediation which allowed them to further explore the claims and defenses ). 8

24 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 14 of 21 Plaintiffs had also already defeated a motion to dismiss under Rule 12(b)(6) and secured class certification under Rule 23. Plaintiffs had a well-informed basis for their belief that the Settlement proposed by an experienced litigator and mediator was a favorable resolution for the Class. This factor strongly supports approval of the Settlement. d) The Risks of Establishing Liability and Damages Support Approval of the Settlement. Grinnell requires that, in assessing the fairness, reasonableness and adequacy of a settlement, courts consider such factors as the risks of establishing liability [and]... the risks of establishing damages. 495 F.2d at 463. Plaintiffs alleged that Defendants omitted to disclose various risks of exposure relating to a mezzanine loan position involving real estate assets in Puerto Rico. These omissions caused Resource Capital s stock price to be artificially inflated during the Class Period. While Plaintiffs believe that the claims have merit, they also recognize that there were significant risks as to whether they would ultimately be able to prove liability and establish damages, as well as with respect to the amount of damages that could be establish. These risks could have manifested themselves at any time throughout the remainder of the case, summary judgment, trial, or on appeal. One issue in particular that related to liability was the timing of Resource Capital s ultimate decision to impair the value of the mezzanine loan. Plaintiffs believed that the mezzanine loan should have been impaired long before it actually was, given that credit rating agencies had been downgrading the creditworthiness of the secured certificates to which the mezzanine loan was subordinate. However, Defendants would have likely relied on internal documents showing that the mezzanine loan s impairment was appropriate in terms of timing and amount. Ultimately, the issue was factual in nature and would have required a jury to resolve. Juries are inherently risky for both plaintiffs and defendants. While Plaintiffs believed that their arguments on this point were strong, the risk of losing tended to support accepting the Settlement. Porritt Decl. at Another issue of concern for Plaintiffs was the risk of having to establish damages at trial. In opposition to Plaintiffs motion for class certification, Defendants argued that Plaintiffs were 9

25 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 15 of 21 unable to calculate damages uniformly among Class Members, namely because the price of Resource Capital s stock was inflated by different amounts at various points in the Class Period depending upon what information was available to the public. Had Plaintiffs proceeded to trial, they would have needed to rely heavily on expert testimony which would have been complex and difficult for a jury to follow. Defendants would have presented testimony from an expert of their own. The risks pertaining to establishing damages also weighed in favor of accepting the Settlement. Porritt Decl. at While Plaintiffs expected to present persuasive testimony establishing causation and damages, Defendants likely would have presented experts in support of their positions. Plaintiffs could not be certain which experts views would be credited by the jury, particularly given the complexity of the underlying factual issues, and who would prevail at trial in this battle of the experts. See, e.g., In re Metlife Demutualization Litig., 689 F. Supp. 2d 297, 332 (E.D.N.Y. 2010) ( The proof on many disputed issues which involve complex financial concepts would likely have included a battle of experts, leaving the trier of fact with difficult questions to resolve. ); In re Am. Bank Note Holographics, Inc. Sec. Litig., 127 F. Supp. 2d 418, (S.D.N.Y. 2001) ( In such a battle, Plaintiffs Counsel recognize the possibility that a jury could be swayed by experts for Defendants. ). The Settlement enables the Class to recover a substantial sum of money, while avoiding continued protracted litigation, significant challenges, and further reducing available resources for recovery. In light of all of these risks, the proposed Settlement is fair, reasonable and adequate. e) The Ability of Defendants to Withstand a Greater Judgment Favors Approval of the Settlement. The resources available to fund a substantial recovery were a factor considered by Plaintiffs in accepting the Settlement. See, e.g., In re Global Crossing Sec. and ERISA Litig., 225 F.R.D. 436, (S.D.N.Y. 2004) (recognizing that protracted litigation could deprive the class members of the substantial amount of insurance money the partial settlement would provide and that the settlement would maximize the recovery of insurance money for the class ). A defendant 10

26 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 16 of 21 is not required to empty its coffers before a settlement can be found adequate. In re Giant Interactive Group, Inc. Sec. Litig., 279 F.R.D. 151, 162 (S.D.N.Y. 2011) (quotation omitted). If the other Grinnell factors are met, a settlement is not unfair merely because the defendants could possibly afford more. Id. While Resource Capital appeared to be in sound financial condition at the time of the Settlement, there was a risk (however small) that Resource Capital could have fallen upon difficult times during the course of further litigation. This risk, when considered with the fact that there was no guarantee further litigation would result in a greater recovery, was enough to weigh in favor of the Settlement. At $9,500,000, the Settlement already presented an excellent outcome for the Class. f) The Range of Reasonableness of the Settlement Amount, in Light of the Best Possible Recovery and All of the Attendant Risks of Litigation, Supports Approval of the Settlement The last two substantive factors that courts consider are the range of reasonableness of the settlement fund in light of (i) the best possible recovery and (ii) litigation risks. In analyzing these two factors, the issue for courts is not whether the settlement represents the best possible recovery, but how the settlement relates to the strengths and weaknesses of the case. A court consider[s] and weigh[s] the nature of the claim, the possible defenses, the situation of the parties, and the exercise of business judgment in determining whether the proposed settlement is reasonable. Grinnell, 495 F.2d at 462 (citations omitted). The Second Circuit has described the range of reasonableness as a range which recognizes the uncertainties of law and fact in any particular case and the concomitant risks and costs necessarily inherent in... any litigation. Wal-Mart Stores, 396 F.3d at 119 (quoting Newman, 464 F.2d at 693). The determination of a reasonable settlement is not susceptible of a mathematical equation yielding a particularized sum, but turns on whether the settlement falls within a range of reasonableness. Chavarria, 875 F. Supp. 2d at 174 (citation omitted). The fact that a proposed settlement may only amount to a fraction of the potential recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and should be 11

27 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 17 of 21 disapproved. Grinnell, 495 F.2d at 455. In fact, there is no reason, at least in theory, why a satisfactory settlement could not amount to a hundredth or even a thousandth part of a single percent of a potential recovery. Chavarria, 875 F. Supp. 2d at 175; Grinnell, 495 F.2d at 455 n.2. (citation omitted). The Settlement is well within the range of reasonableness in light of the substantial risks presented by this litigation. Estimating aggregate damages can be challenging because, among other things, assumptions must be made regarding trading activity. Here, a realistic estimate of potential maximum recoverable damages, assuming Plaintiffs prevailed on all of the sustained claims, was approximately $56 million. But those damages would be reduced or eliminated if the jury accepted some or all of Defendants arguments. The $9,500,000 recovery is an excellent result for the Class in light of the attendant risks of continued litigation. Indeed, Plaintiffs recovery of 17% of the recoverable damages is in line with figures reported by NERA Economic Consulting in 2018, noting that the median of settlement value as a percentage of [ ] investor losses was 4.7% for cases with investor losses between $50 million and $99 million. See Porritt Decl. Ex. 1 at 37, Fig. 28. Additionally, according to a 2018 report by Cornerstone Research, in securities class actions where estimated damages were between $25 million and $74 million, the median recovery was only 6% of estimated damages. See Porritt Decl. Ex. 2 at 8, Fig. 7. In accepting the Settlement, Plaintiffs understood that [a] very large bird in the hand in this litigation is surely worth more than whatever birds are lurking in the bushes. In re Chambers Dev. Sec. Litig., 912 F. Supp. 822, 838 (W.D. Pa. 1995). Moreover, a court may not substitute its judgment for that of the parties who negotiated the settlement. Chavarria, 875 F. Supp. 2d at 172. Plaintiffs attorneys, Levi & Korsinsky, LLP, are intimately familiar with the facts of the case and have extensive experience prosecuting comparable securities class actions. In these circumstances, Plaintiffs attorneys opinion that the Settlement was reasonable is entitled to great weight. Padro, 2013 WL , at *7 ( Where, as here, settlement has been reached after an arms-length negotiation, great weight is accorded to the recommendations of counsel, who are most closely acquainted with the facts of the underlying 12

28 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 18 of 21 litigation. ) (citation omitted). The recommendation of Plaintiffs also strongly supports the fairness of the Settlement. See Declaration of Allen Altman at 5; Declaration of Douglass Drees at 5. In sum, a review of the Grinnell factors strongly supports a finding that the Settlement is fair, reasonable, and adequate. B. The Plan of Allocation is Fair, Reasonable, and Adequate. The standard for approval of a plan of allocation is the same as the standard for approving the settlement as a whole: namely, it must be fair and adequate. Maley v. Del Global Techs. Corp., 186 F. Supp. 2d 358, 367 (S.D.N.Y. 2002) (internal quotations omitted). An allocation formula need only have a reasonable, rational basis, particularly if recommended by experienced and competent class counsel. In re WorldCom, Inc. Sec. Litig., 388 F. Supp. 2d 319, 344 (S.D.N.Y. 2005) (citation omitted); see also In re Visa Check/Mastermoney Antitrust Litig., 297 F. Supp. 2d 503, 518 (E.D.N.Y. 2003), aff d sub nom., Wal-Mart, 396 F.3d 96; Am. Bank Note, 127 F. Supp. 2d at Further, courts enjoy broad supervisory powers over the administration of class-action settlements to allocate the proceeds among the claiming class members... equitably. Beecher v. Able, 575 F.2d 1010, 1016 (2d Cir. 1978). Plaintiffs proposed Plan of Allocation has a rational basis and was formulated with the assistance of Plaintiffs experts, thus ensuring its fairness and reliability. See Veeco, 2007 WL , at *13. Under the proposed Plan of Allocation, each Authorized Claimant (i.e., a Class Member that submits a valid and timely claim with a Recognized Loss) will receive a pro rata share of the Net Settlement Fund. The share that each Authorized Claimant receives will depend upon the amount of his or her Recognized Loss relative to the total aggregate Recognized Losses of all the Authorized Claimants. The Recognized Loss of each Authorized Claimant is calculated simply by multiplying a set dollar amount by the total number of shares held by the Authorized Claimant at the end of the Class Period. Depending on which securities the Authorized Claimant owned (either common stock or preferred stock), his or her claim will be paid from a portion of the Net Settlement Amount dedicated for claims arising from those securities (i.e., a sub-fund). See Porritt Decl. at

29 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 19 of 21 As described in the Porritt Declaration, the Plan of Allocation is based upon the premise that Class Members sustained damages by purchasing their stock at artificially inflated prices. Accordingly, the proposed Plan of Allocation seeks to compensate Class Members in accordance with the decrease that Resource Capital s stock price suffered upon dissemination of curative disclosures into the market, i.e., the August 4, 2015 announcement concerning the impairment of the mezzanine loan. Porritt Decl. at The Plan of Allocation mirrors the complaint s allegations, which is common in securities class actions. In re Datatec Sys., Inc. Sec. Litig., No. 04-CV-525, 2007 WL , at *5 (D.N.J. Nov. 28, 2007); see also In re Gen. Instrument Sec. Litig., 209 F. Supp. 2d 423, 431 (E.D. Pa. 2001) (deeming plan of allocation where claimants are to be reimbursed on a pro rata basis for their recognized losses based largely on when they bought and sold their shares of [company] stock as even handed ). The Plan of Allocation is substantially similar to other plans of allocation that have been approved and successfully implemented in other securities class action settlements, including within this Circuit. See In re Veeco Instruments Inc. Sec. Litig., No. 05 MDL 01695, 2007 WL , at *14 (S.D.N.Y. Nov. 7, 2007) ( Each valid claim will then be calculated so that each authorized claimant will receive, on a proportionate basis, the share of the net settlement fund that the claimant s recognized loss bears to the total recognized loss of all authorized claimants. ); Global Crossing, 225 F.R.D. at 462 ( Pro-rata distribution of settlement funds based on investment loss is clearly a reasonable approach. ). Given its sound basis and fair manner of operation, Plaintiffs request that the Court approve the proposed Plan of Allocation. See, e.g., Chavarria, 875 F. Supp. 2d at 175 ( In determining whether a plan of allocation is fair, courts look primarily to the opinion of counsel. That is, as a general rule, the adequacy of an allocation plan turns on whether counsel has properly apprised itself of the merits of all claims, and whether the proposed apportionment is fair and reasonable in light of that information. ). 14

30 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 20 of 21 C. Notice to the Class Satisfies the Requirements of Rule 23, Due Process, and the PSLRA The Notice provided to the Class satisfied the requirements of Rule 23(c)(2)(B), which requires the best notice that is practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. Fed. R. Civ. P. 23(c)(2)(B). The Notice also satisfied Rule 23(e)(1), which requires that notice of a settlement be reasonable. Fed. R. Civ. P. 23(e)(1). Notice is reasonable if it fairly apprise[s] the prospective members of the class of the terms of the proposed settlement and of the options that are open to them in connection with the proceedings. Wal-Mart, 396 F.3d at 114. Both the substance of the Notice and the method of its dissemination to potential Class Members satisfied these standards. See In re Bank of Am. Corp. Sec., Derivative and ERISA Litig., 772 F.3d 125, 133 n.5 (2d Cir. 2014) (affirming sufficiency of similar notice plan). As noted above, in accordance with the Court s Preliminary Approval Order, the Claims Administrator, Epiq, has sent more than 52,000 copies of the Notice to potential Class Members and their brokers and nominees. See Villanova Decl. 7. Epiq utilized several resources to reasonably identify potential members of the Class, including information provided by Resource Capital, a proprietary list maintained by Epiq of the largest and most common U.S. Banks, brokerage firms, and other nominees, and research of Form 13-F filed with the SEC. Id The Notice requires brokers and nominees, within ten days, to either (i) send to the beneficial owners of the securities, or (ii) provide to Epiq the names and addresses of such persons. Id. 4. Plaintiffs also caused the Notice to be published over the PR Newswire, and copies of the Notice were made available on a dedicated website maintained by Epiq. Id. 8, 15. This combination of individual mail to Class Members who could be identified with reasonable effort, supplemented by summary and electronic notice in widely circulated publications, was the best notice... practicable under the circumstances and satisfies the requirements of due process, Rule 23, and the PSLRA. Fed. R. Civ. P. 23(c)(2)(B); see, e.g., Padro, 2013 WL , at *3 ( Notice need not be perfect, but need be only the best notice practicable 15

31 Case 1:15-cv LLS Document 83 Filed 06/29/18 Page 21 of 21 under the circumstances, and each and every class member need not receive actual notice, so long as class counsel acted reasonably in choosing the means likely to inform potential class members. ); see also Arace v. Thompson, No. 08 Civ. 7905, 2011 WL , at *4 (S.D.N.Y. Aug. 17, 2011) (finding notice of settlement published on a nationally-circulated businessoriented publication catering to investors, sufficient[] [to] apprise[]... shareholders of the nature of the proposed settlement ). III. CONCLUSION Plaintiffs respectfully request that the Court approve the proposed Settlement and Plan of Allocation as fair, reasonable, and adequate. DATED: June 29, 2018 Respectfully submitted, By: /s/ Adam Apton. Nicholas I. Porritt Adam M. Apton LEVI & KORSINSKY, LLP th Street NW, Suite 115 Washington, DC Telephone: Facsimile: Attorneys for Plaintiffs Douglas Drees and Allen Altman and Lead Counsel for the Class 16

32 Case 1:15-cv LLS Document 84 Filed 06/29/18 Page 1 of 2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, v. Plaintiffs, RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Docket No.: 1:15-cv LLS Hon. Louis L. Stanton PLAINTIFFS NOTICE OF MOTION AND MOTION FOR AN AWARD OF ATTORNEYS FEES, REIMBURSEMENT OF LITIGATION EXPENSES, AND INCENTIVE AWARDS TO PLAINTIFFS Defendants. TO: All Counsel of Record PLEASE TAKE NOTICE that, pursuant to the April 3, 2018 Order Preliminarily Approving Settlement (ECF No.81) (the Court's Preliminary Approval Order ), on August 3, 2018, at 12:00 p.m. in Courtroom 21C at the United States District Court for the Southern District of New York, Daniel Patrick Moynihan Courthouse, 500 Pearl St., New York, NY 10007, the Honorable Louis L. Stanton, presiding, Plaintiffs Douglas Drees and Allen Altman ( Plaintiffs ), will and hereby do, move for an award of attorneys' fees, reimbursement of litigation expenses, and incentive awards for Plaintiffs. This motion is based upon the Memorandum of Law in Support of Plaintiffs Motion for an Award of Attorneys Fees, Reimbursement of Litigation Expenses, and Incentive Awards; the Declarations of Nicholas I. Porritt, Alexander Villanova, Douglas Drees, Allen Altman, and Casey E. Sadler; the record and proceedings in this Action; and such matters as the Court may consider at the time of the hearing. 1

33 Case 1:15-cv LLS Document 84 Filed 06/29/18 Page 2 of 2 DATED: June 29, 2018 Respectfully submitted, By: /s/ Adam Apton. Nicholas I. Porritt Adam M. Apton LEVI & KORSINSKY, LLP 30 Broad Street, 24th Floor New York, New York Telephone: (212) Facsimile: (212) Attorneys for Plaintiffs Douglas Drees and Allen Altman and Lead Counsel for the Class 2

34 Case 1:15-cv LLS Document 84-1 Filed 06/29/18 Page 1 of 1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, v. Plaintiffs, RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Docket No.: 1:15-cv LLS Hon. Louis L. Stanton [PROPOSED] ORDER GRANTING PLAINTIFFS MOTION FOR: (I) AN AWARD OF ATTORNEYS FEES AND REIMBURSEMENT OF LITIGATION EXPENSES; AND (II) INCENTIVE AWARDS TO PLAINTIFFS Defendants. Having read and considered the papers filed and arguments made by counsel, and good cause appearing, IT IS HEREBY ORDERED AS FOLLOWS: 1. The Court hereby awards Plaintiffs attorneys, Levi & Korsinsky, LLP, attorneys fees in the amount of $3,166,667 (33% of the Settlement Amount). 2. The Court awards Plaintiffs attorneys, Levi & Korsinsky, LLP, reimbursement of costs in the amount of $199, The Court awards Lead Plaintiff Douglas Drees an incentive award in the amount of $10, The Court awards Plaintiff Allen Altman an incentive award in the amount of $5,000. SO ORDERED in the Southern District of New York on, HON. LOUIS L. STANTON UNITED STATES DISTRICT JUDGE

35 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 1 of 23 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, v. Plaintiffs, RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Docket No.: 1:15-cv LLS Hon. Louis L. Stanton Date: August 3, 2018 Time: 12:00 p.m. Courtroom: 21C Defendants. PLAINTIFFS MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR: (I) AN AWARD OF ATTORNEYS FEES AND REIMBURSEMENT OF LITIGATION EXPENSES; AND (II) INCENTIVE AWARDS TO PLAINTIFFS Nicholas I. Porritt Adam M. Apton LEVI & KORSINSKY, LLP th Street NW, Suite 115 Washington, DC Telephone: Facsimile: Attorneys for Plaintiffs Douglas Drees and Allen Altman and Lead Counsel for the Class

36 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 2 of 23 TABLE OF CONTENTS I. INTRODUCTION... 1 II. ARGUMENT... 2 A. Lead Counsel is Entitled to an Award of Attorneys Fees from the Common Fund... 2 B. The Requested Attorneys Fees are Reasonable Under the Percentage-ofthe-Fund Method... 4 C. A Review of the Goldberger Factors Confirms that the Requested 33% Fee is Fair and Reasonable The Time and Labor Expended by Lead Counsel Support the Requested Fee The Magnitude and Complexity of the Action Support the Requested Fee The Risks of the Litigation Support the Requested Fee The Quality of Lead Counsel s Representation Supports the Requested Fee Second Circuit Precedent Supports the 33% Fee as a Reasonable Percentage of the Total Recovery Public Policy Consideration Supports the Requested Fee Plaintiffs Approval and the Settlement Class Reaction Support the Requested Fee D. A Lodestar Cross-Check Confirms the Reasonableness of the Fee Request E. Lead Counsel s Litigation Expenses are Reasonable and Should Be Approved for Reimbursement F. Plaintiffs Should Be Awarded Incentive Awards III. CONCLUSION i

37 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 3 of 23 Cases TABLE OF AUTHORITIES In re Adelphia Commc ns Corp. Sec. and Derivative Litig., No. 03 MDL 1529, 2006 WL (S.D.N.Y. Nov. 16, 2006) In re Am. Int l Grp, Inc Sec. Litig., No. 08-cv (S.D.N.Y.)... 4 In re American Bank Note Holographics, 127 F. Supp. 2d 418 (S.D.N.Y. 2001)... 8 Anwar v. Fairfield Greenwich Ltd., No. 09-CV-118 (VM), 2012 U.S. Dist. LEXIS (S.D.N.Y. June 1, 2012) In re Apac Teleservs., Inc. Sec. Litig., No. 97 Civ. 9145, (S.D.N.Y. June 29, 2001) (Dkt. 54) In re AremisSoft Corp. Sec. Litig., 210 F.R.D. 109 (D.N.J. 2002) Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299 (1985)... 2 In re Bear Stearns Companies, Inc. Sec., Derivative, & ERISA Litig., 909 F. Supp. 2d 259 (S.D.N.Y. 2012) Becher v. Long Island Lighting Co., 64 F.Supp.2d 174 (E.D.N.Y.1999)... 5 Blum v. Stenson, 465 U.S. 886 (1984)... 4 Boeing Co. v. Van Gemert, 444 U.S. 472 (1980)... 2 Buccellato v. AT&T Operations, Inc., No , 2011 U.S. Dist. LEXIS (N.D. Cal. June 30, 2011) In re China Sunergy Sec. Litig., No. 07 Civ. 7895, 2011 WL (S.D.N.Y. May 13, 2011) City of Detroit v. Grinnell Corp., 495 F.2d 448 (2d Cir. 1974)... 7 City of Providence v. Aéropostale, Inc., 2014 U.S. Dist. LEXIS 64517, 2014 WL (S.D.N.Y. May 9, 2014)... 11, 13 In re Comverse Tech., Inc. Sec. Litig., No. 06-CV-1825, 2010 WL (E.D.N.Y. June 24, 2010)... 7, 8, 10, 12 In re Currency Conversion Fee Antitrust Litig., 263 F.R.D. 110 (S.D.N.Y. 2009) ii

38 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 4 of 23 Davis v. J.P. Morgan Chase & Co., 827 F. Supp. 2d 172 (W.D.N.Y. 2011)... 3, 5 Dornberger v. Metro. Life Ins. Co., 203 F.R.D. 118 (S.D.N.Y. 2001) Dupler v. Costco Wholesale Corp., 705 F. Supp. 2d 231 (E.D.N.Y. 2010) In re Enron Corp. Sec., Deriv. & ERISA Litig., 586 F. Supp. 2d 732 (S.D. Tex. 2008) In re Facebook, Inc. IPO Sec. & Derivative Litig., No. MDL , 2015 WL (S.D.N.Y. Nov. 9, 2015)... 4 In re FLAG Telecom Holdings, Ltd. Sec. Litig., No. 02-cv-3400, 2010 WL (S.D.N.Y. Nov. 8, 2010)... 7, 9, 11, 12 Flores v. Anjost Corp., No. 11 Civ. 1531, 2014 WL (S.D.N.Y. Jan. 29, 2014)... 4, 5 Fogarazzo v. Lehman Bros. Inc., 2011 U.S. Dist. LEXIS 17747, 2011 WL (S.D.N.Y. Feb. 23, 2011) In re Giant Interactive Grp., Inc. Sec. Litig., 279 F.R.D. 151 (S.D.N.Y. 2001)... 2, 11 In re Global Crossing Sec. and ERISA Litig., 225 F.R.D. 436 (S.D.N.Y. 2004)... 9 Goldberger v. Integrated Res., Inc., 209 F.3d 43 (2d Cir. 2000)... passim Hayes v. Harmony Gold Mining Co., 509 Fed. App x 21 (2d Cir. 2013)... 3 Hayes v. Harmony Gold Mining Co., No. 08 Civ , 2011 WL (S.D.N.Y. Dec. 2, 2011)... 4 Hicks v. Morgan Stanley, No. 01 Civ , 2005 WL (S.D.N.Y. Oct. 24, 2005)... 2, 11, 15 In re IMAX Sec. Litig., No. 06 CIV NRB, 2012 WL (S.D.N.Y. Aug.1, 2012)... 4 J.I. Case Co. v. Borak, 377 U.S. 426 (1964)... 2 Khait v. Whirlpool Corp., No. 06-cv-6381, 2010 WL (E.D.N.Y. Jan. 20, 2010)... 3, 4, 5, 11 Maley v. Del Global Techs. Corp, 186 F. Supp. 2d 358 (S.D.N.Y. 2002)... 11, 13 iii

39 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 5 of 23 In re Marsh ERISA Litig., 265 F.R.D. 128 (S.D.N.Y. 2010)... 9, 10 In re Metlife Demutualization Litig., 689 F. Supp. 2d 297 (E.D.N.Y. 2010)... 8 Missouri v. Jenkins, 491 U.S. 274 (1989)... 4 Moloney v. Shelly's Prime Steak, Stone Crab & Oyster Bar, 2009 U.S. Dist. LEXIS 27899, 2009 WL (S.D.N.Y. Mar. 31, 2009) Monzon v. 103W77 Partners, LLC, No. 13 Civ. 5951, 2015 WL (S.D.N.Y. Mar. 5, 2015)... 3 In re PaineWebber Ltd. P Ships Litig., 171 F.R.D. 104 (S.D.N.Y. 1997) In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., 991 F. Supp. 2d 437 (E.D.N.Y. 2014)... 3, 4, 12 In re Rite Aid Corp. Sec. Litig., 146 F. Supp. 2d 706 (E.D. Pa. 2001) In re RJR Nabisco Sec. Litig., No. 88 Civ (MBM), 1992 U.S. Dist. LEXIS (S.D.N.Y. Aug. 24, 1992) Roberts v. Texaco, Inc., 979 F. Supp. 185 (S.D.N.Y. 1997) Savoie v. Merchs. Bank, 166 F.3d 456 (2d Cir. 1999)... 4 Sewell v. Bovis Lend Lease, Inc., No. 09 Civ. 6548, 2012 WL (S.D.N.Y. Apr. 16, 2012)... 3 Steinver v. Am. Broad Co., 248 F. App x 780 (9th Cir. 2007) In re Sumitomo Copper Litig., 189 F.R.D. 274 (S.D.N.Y. 1999)... 7 In re Telik, Inc. Sec. Litig., 576 F. Supp. 2d 570 (S.D.N.Y. 2008)... 2, 7, 13 Teachers Ret. Sys. of La. v. A.C.L.N., Ltd., No. 01-CV-11814, 2004 WL (S.D.N.Y. May 14, 2004) Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007)... 2, 15 Van Vranken v. Atlantic Richfield Co., 901 F. Supp. 294 (N.D. Cal. 1995) iv

40 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 6 of 23 In re Van Der Moolen Holding N. V. Sec. Litig., 2006 U.S. Dist. LEXIS (S.D.N.Y. Dec. 7, 2006) In re Veeco Instruments Inc. Sec. Litig., No. 05 MDL 01695, 2007 WL (S.D.N.Y. Nov. 7, 2007)... 2, 9, 12, 13 Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005)... 3, 4 Rules Fed. R. Civ. P , 14, 17 v

41 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 7 of 23 I. INTRODUCTION Court-appointed Lead Counsel Levi & Korsinsky, LLP ( Lead Counsel ), achieved an extraordinary result for the Settlement Class in this case. After nearly three years of litigation and over 2,000 hours of billable work on a completely contingent basis, Lead Counsel secured a Settlement of $9,500,000. This figure represents 17% of the Class s total estimated damages which is far better than the settlements in many cases similar in size to the one at hand. In exchange for their efforts, Lead Counsel applies for an award of attorneys fees in the amount of $3,166,667 (33% of the Settlement Amount). 1 Lead Counsel also seeks reimbursement of out-of-pocket expenses it incurred in the course of the litigation. These expenses total $199, and are largely attributable to expert fees paid by Lead Counsel for assistance in connection with evaluating damages and class certification issues. Lead Counsel has not been reimbursed any amounts at all since commencing this litigation back in September Lead Counsel respectfully requests that they be reimbursed now that the case is over. Finally, in exchange for their assistance and willingness to serve in representative capacities during the action, Lead Counsel requests that Plaintiffs Douglas Drees and Allen Altman receive incentive awards to compensate them for their time and effort. They both participated heavily in documentary discovery and appeared for full-day depositions. They were appointed by this Court as class representatives and, to that end, faithfully fulfilled their fiduciary duties to the Class. For the reasons set forth below, Lead Counsel respectfully requests that the Court grant its motion in its entirety. 1 Unless otherwise defined, capitalized terms herein have the same meaning as set forth in the Stipulation of Settlement, dated as of February 5, 2018 (the Settlement or the Stipulation ) (Dkt. No. 78). 1

42 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 8 of 23 II. ARGUMENT A. Lead Counsel is Entitled to an Award of Attorneys Fees from the Common Fund The Supreme Court has long recognized 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 a whole. Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980); see Goldberger v. Integrated Res., Inc., 209 F.3d 43, 47 (2d Cir. 2000). Courts recognize that awards of fair attorneys fees from a common fund serve to encourage skilled counsel to represent those who seek redress for damages inflicted on entire classes of persons, and therefore to discourage future alleged misconduct of a similar nature. In re Telik, Inc. Sec. Litig., 576 F. Supp. 2d 570, 585 (S.D.N.Y. 2008); see In re Veeco Instruments Inc. Sec. Litig., No. 05 MDL 01695, 2007 WL , at *2 (S.D.N.Y. Nov. 7, 2007) (same); see also In re Giant Interactive Grp., Inc. Sec. Litig., 279 F.R.D. 151, 165 (S.D.N.Y. 2011) (an award of appropriate attorneys fees should provid[e] lawyers with sufficient incentive to bring common fund cases that serve the public interest and attract well-qualified plaintiffs counsel who are able to take a case to trial, and who defendants understand are able and willing to do so ) (citations omitted). The Supreme Court has emphasized that private securities actions, such as this one, are an essential supplement to criminal prosecutions and civil enforcement actions brought by the SEC. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313 (2007); accord Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 310 (1985) (private securities actions provide a most effective weapon in the enforcement of the securities laws and are a necessary supplement to [SEC] action. ) (quoting J.I. Case Co. v. Borak, 377 U.S. 426, 432 (1964)). Compensating plaintiffs counsel for the risks they take in bringing these actions is essential because [s]uch actions could not be sustained if plaintiffs counsel were not to receive remuneration from the settlement fund for their efforts on behalf of the class. Hicks v. Morgan Stanley, No. 01 Civ , 2005 WL , at *9 (S.D.N.Y. Oct. 24, 2005). 2

43 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 9 of 23 Most courts, including this courts within this District, have found that the percentage-ofthe-fund method, under which counsel is awarded a percentage of the fund that it recovered, is the preferred means to determine a fee because it directly aligns the interests of the class and its counsel, mimics the compensation system actually used by individual clients to compensate the attorneys, provides a powerful incentive for the efficient prosecution and early resolution of litigation, and preserves judicial resources. Monzon v. 103W77 Partners, LLC, No. 13 Civ. 5951, 2015 WL , at *2 (S.D.N.Y. Mar. 5, 2015) (citing Sewell v. Bovis Lend Lease, Inc., No. 09 Civ. 6548, 2012 WL , at *10 (S.D.N.Y. Apr. 16, 2012) ( [The percentage] method is similar to private practice where counsel operates on a contingency fee, negotiating a reasonable percentage of any fee ultimately awarded. )); see Khait v. Whirlpool Corp., No. 06-cv-6381, 2010 WL , at *8 (E.D.N.Y. Jan. 20, 2010) (Carter, J.). 2 The Second Circuit has expressly approved the percentage method, recognizing that the lodestar method proved vexing and had resulted in an inevitable waste of judicial resources. Goldberger, 209 F.3d at (holding that either the percentage-of-the-fund method or lodestar method may be used to determine appropriate attorneys fees); Savoie v. Merchs. Bank, 166 F.3d 456, 460 (2d Cir. 1999) (the percentage-of-the-fund method has been deemed a solution to certain problems that may arise when the lodestar method is used in common fund cases ). The Second 2 See also Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 121 (2d Cir. 2005); Hayes v. Harmony Gold Mining Co., 509 Fed. App x 21, 24 (2d Cir. 2013) (unpubl.) ( [A]s the district court recognized, the prospect of a percentage fee award from a common settlement fund, as here, aligns the interests of class counsel with those of the class. ); In re Payment Card Interchange Fee & Merch. Disc. Antitrust Litig., 991 F. Supp. 2d 437, 440 (E.D.N.Y. 2014) ( The percentage method better aligns the incentives of plaintiffs counsel with those of the class members because it bases the attorneys fees on the results they achieve for their clients, rather than on the number of motions they file, documents they review, or hours they work. The percentage method also accords with the overwhelming prevalence of contingency fees in the market for plaintiffs counsel.... ) (citation omitted); Davis v. J.P. Morgan Chase & Co., 827 F. Supp. 2d 172, 184 (W.D.N.Y. 2011) (the advantages of the percentage method... are that it provides an incentive to attorneys to resolve the case efficiently and to create the largest common fund out of which payments to the class can be made, and that it is consistent with the system typically used by individual clients to compensate their attorneys ). 3

44 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 10 of 23 Circuit, and Courts within this District, have acknowledged that the trend in this Circuit is toward the percentage method. Whirlpool, 2010 WL , at *8. 3 B. The Requested Attorneys Fees are Reasonable Under the Percentage-of-the- Fund Method The Supreme Court has recognized that an appropriate court-awarded fee is intended to approximate what counsel would receive if they were bargaining for the services in the marketplace. See Missouri v. Jenkins, 491 U.S. 274, (1989). If this were a nonrepresentative action, the customary fee arrangement would be contingent, on a percentage basis, and in the range of 30% to 33% of the recovery. See Blum v. Stenson, 465 U.S. 886, (1984) ( 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. ) (Brennan, J., concurring). Moreover, at 33%, the requested fee is equal to the percentage fee awards granted in many other comparable securities class actions within the Second Circuit. See, e.g., In re Facebook, Inc. IPO Sec. & Derivative Litig., No. MDL , 2015 WL , at *11 (S.D.N.Y. Nov. 9, 2015), aff'd sub nom In re Facebook, Inc., 674 F. App'x 37 (2d Cir. 2016) (awarding 33% of total Settlement); In re IMAX Sec. Litig., No. 06 CIV NRB, 2012 WL , at *7 (S.D.N.Y. Aug.1, 2012) (finding an award of 33% of a $12 million settlement reasonable); Hayes v. Harmony Gold Mining Co., No. 08 Civ , 2011 WL , at *1 (S.D.N.Y. Dec. 2, 2011) (awarding 33.3% of $9 million settlement fund), aff d, 509 F. App x 21 (2d Cir. 2013) (unpubl.); In re Blech Sec. Litig., No. 94 CIV. 7696(RWS), 2002 WL , at *1 (S.D.N.Y. Dec.4, 2002) (finding an award of 33 1/3% reasonable); Becher v. Long Island Lighting Co., 64 F.Supp.2d 174, See also Wal-Mart, 396 F.3d at 121; see also Davis, 827 F. Supp. 2d at ; Payment Card Interchange Fee, 991 F. Supp. 2d at 440 ( The trend in this Circuit, and the method I adopt here, is a percentage of the fund. ); In re Comverse Tech., Inc. Sec. Litig., No. 06-CV-1825, 2010 WL , at *2 (E.D.N.Y. June 24, 2010); In re Am. Int l Grp, Inc Sec. Litig., No. 08-cv (S.D.N.Y.), Order filed March 20, 2015 (DKT No. 517); Flores v. Anjost Corp., No. 11 Civ. 1531, 2014 WL , at *8 (S.D.N.Y. Jan. 29, 2014) ( The trend in this Circuit is to use the percentage of the fund method to compensate attorneys in common fund cases like this one. ). 4

45 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 11 of 23 (E.D.N.Y.1999) (citations omitted) (A fee award of one-third of the Settlement Fund is well within the range accepted by courts in this circuit. ). The requested 33% fee is also well within the range of percentage fees awarded in other, non-securities, complex class actions within the Second Circuit further confirming the reasonableness of the requested 33% award. See, e.g., Whirlpool, 2010 WL , at *8 (Carter, J.) (awarding fees of 33% of $9.25 million settlement fund in FLSA case; Class Counsel s request for 33% of the Fund is reasonable and consistent with the norms of class litigation in this circuit ; citing other awards of 33%); Flores, 2014 WL , at *8 (awarding fees of 1/3 of settlement amount in wage-and-hour case); Davis, 827 F. Supp. 2d at (awarding fees of 1/3 of $42 million settlement fund in wage-and-hour case). C. A Review of the Goldberger Factors Confirms that the Requested 33% Fee is Fair and Reasonable The appropriate criteria for courts within the Second Circuit to consider when reviewing a request for attorneys fees in a common-fund case include the Goldberger factors: (1) the time and labor expended by counsel; (2) the magnitude and complexities of the litigation; (3) the risk of the litigation; (4) the quality of the representation; (5) the requested fee in relation to the settlement; and (6) public policy considerations. Goldberger, 209 F.3d at 50 (internal quotes and citation omitted), cited in BofA, 772 F.3d at 134 (affirming attorneys fee award, over objection, that was based upon an application of the criteria set out in Goldberger ). Consideration of these factors demonstrates that the fee requested by Lead Counsel is reasonable. 1. The Time and Labor Expended by Lead Counsel Support the Requested Fee The work undertaken by Lead Counsel in prosecuting this complex securities class action and arriving at this Settlement has been time-consuming and challenging. Over the past two and a half years, Lead Counsel, while striving to efficiently and effectively represent the interests of the Settlement Class, dedicated a substantial amount of labor, time, and money to pursue and resolve 5

46 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 12 of 23 the claims. As set forth in greater detail in the Declaration of Nicholas I. Porritt, Lead Counsel s efforts included, among other things: Performing an in-depth review and analysis of (a) Resource Capital s SEC filings; (b) research reports by securities and financial analysts; (c) transcripts of Resource Capital s earnings conference calls and industry conferences; (d) Resource Capital s press releases; (e) news and media reports concerning Resource Capital and other facts related to this action; and (f) data reflecting the pricing of Resource Capital s securities. Conducting a thorough investigation into the law and facts of the case; Conferring extensively with experts and consultants concerning the specialized issues in the case, including in drafting the Complaint, and when analyzing class certification, loss causation, and damages; Drafting the detailed Amended Complaint based on Lead Counsel s extensive factual investigation and legal research into the applicable claims; Preparing an opposition in response to Defendants motions to dismiss; Conducting months of discovery, including propounding and responding to multiple discovery requests, and producing and reviewing documents, including reviewing over 170,000 pages of documents produced from Resource Capital and several non-parties, including Moody s, Fitch Ratings, BlackRock, and Grant Thornton LLP; Drafting Plaintiffs mediation statement, analyzing Defendants mediation statement, and preparing for and participating in the mediation process, including a full-day mediation session held before a respected mediator; Drafting the detailed Second Amended Complaint based on Lead Counsel s extensive factual investigation and legal research into the applicable claims; and Preparing the Motion for Class Certification, Appointment of Class Representatives, and Appointment of Class Counsel, including working with experts and preparing and taking expert and party deposition testimony. 6

47 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 13 of 23 In total, as set forth in the accompanying Declaration of Nicholas I. Porritt, Lead Counsel expended over 2,000 hours prosecuting the Action. See Porritt Decl. at 4, 79. The significant amount of time and effort devoted to this case by Lead Counsel confirms that the fee requested here is reasonable. 2. The Magnitude and Complexity of the Action Support the Requested Fee Courts have long recognized that securities class actions are notably difficult and notoriously uncertain. In re FLAG Telecom Holdings, Ltd. Sec. Litig., No. 02-cv-3400, 2010 WL , at *27 (S.D.N.Y. Nov. 8, 2010) (quoting In re Sumitomo Copper Litig., 189 F.R.D. 274, 281 (S.D.N.Y. 1999)). This case, in particular, was extremely complex. It involved complicated accounting rules pertaining to real estate finance and the creditworthiness of a portion of a mezzanine loan within a much larger collateralized security. Lead Counsel was required to seek expert assistance with regard to building a theory of liability. Porritt Decl. 23. Damages also presented difficult issues, as Defendants were intent on challenging Plaintiffs ability to prove loss causation. Porritt Decl. 26. This area of litigation is specialized, and even more so when dealing with the type of financial instruments at issue in this litigation. Accordingly, the magnitude and complexity of the Action support the conclusion that the requested fee is fair and reasonable. 3. The Risks of the Litigation Support the Requested Fee The risk of the litigation is often considered the most important Goldberger factor. See Goldberger, 209 F.3d at 54; In re Comverse Tech., Inc. Sec. Litig., No. 06-CV-1825, 2010 WL at *5 (E.D.N.Y. June 24, 2010); Telik, 576 F. Supp. 2d at 592. The Second Circuit has recognized that the risk associated with a case undertaken on a contingent fee basis is an important factor in determining an appropriate fee award: No one expects a lawyer whose compensation is contingent upon his success to charge, when successful, as little as he would charge a client who in advance had agreed to pay for his services, regardless of success. Nor, particularly in complicated cases producing large recoveries, is it just to make a fee depend solely on the reasonable amount of time expended. 7

48 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 14 of 23 City of Detroit v. Grinnell Corp., 495 F.2d 448, 470 (2d Cir. 1974) (citation omitted), abrogated on other grounds by Goldberger, 209 F.3d 43 (2d Cir. 2000). The Court should bear in mind that [l]ittle about litigation is risk-free, and class actions confront even more substantial risks than other forms of litigation. Comverse, 2010 WL , at *5. Here, Plaintiffs alleged claims for false statements and omissions regarding Resource Capital s disclosures over a mezzanine loan position. Plaintiffs alleged that Defendants concealed that Resource Capital was exposed to a risk arising from the fact that the mezzanine loan was secured by significant real estate assets in Puerto Rico. While Lead Counsel believes that the claims have merit, there were significant risks as to whether Plaintiffs would ultimately be able to prove liability and establish damages, as well as with respect to the amount of damages that could be established. Specifically, whether and to what extent the mezzanine loan should have been impaired earlier in time was a major question of fact, one that a jury could have potentially decided in favor of Defendants. Porritt Decl Although the Court held that Plaintiffs successfully stated a claim for relief in response to Defendants motion to dismiss (which was not an easy task under the heightened pleading standard of the PSLRA), Lead Counsel understood that risks remained in further prosecution. These risks could have manifested themselves at any time throughout the remainder of the case, including during summary judgment, trial, or on appeal. Several of the contested issues, including loss causation, would ultimately have required expert testimony before the jury. While Lead Counsel expected to present persuasive testimony establishing causation and damages, Defendants likely would have presented experts in support of their positions. Porritt Decl Lead Counsel could not be certain which experts views would be credited by the jury, particularly given the complexity of the underlying factual issues, and who would prevail at trial in this battle of the experts. See, e.g., In re Metlife Demutualization Litig., 689 F. Supp. 2d 297, 332 (E.D.N.Y. 2010) ( The proof on many disputed issues which involve complex financial concepts would likely have included a battle of experts, leaving the trier of fact with difficult questions to resolve. ); In re American Bank Note Holographics, 127 F. Supp. 2d 418, (S.D.N.Y. 2001) ( In such a battle, Plaintiffs Counsel recognize the possibility that a jury could be swayed by experts for Defendants. ). 8

49 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 15 of 23 Accordingly, the risks faced by Lead Counsel were very real. In the face of these uncertainties, Lead Counsel undertook this case on a wholly contingent basis, knowing that the litigation could last for years and would require it to devote substantial attorney time and significant litigation expenses with no guarantee of compensation. There are numerous class actions in which counsel expended thousands of hours and yet received no remuneration whatsoever despite their diligence and expertise. Veeco, 2007 WL , at *6. Lead Counsel s assumption of this contingency-fee risk strongly supports the reasonableness of the requested fee. See FLAG Telecom, 2010 WL , at *27 ( the risk associated with a case undertaken on a contingent fee basis is an important factor in determining an appropriate fee award ); In re Marsh ERISA Litig., 265 F.R.D. 128, 148 (S.D.N.Y. 2010) ( There was significant risk of non-payment in this case, and Plaintiffs Counsel should be rewarded for having borne and successfully overcome that risk. ). 4. The Quality of Lead Counsel s Representation Supports the Requested Fee The quality of the representation is another important factor that supports the reasonableness of the requested fee. The quality of the representation here is best evidenced by the quality of the result achieved. See Goldberger, 209 F.3d at 55; Veeco, 2007 WL , at *7; In re Global Crossing Sec. and ERISA Litig., 225 F.R.D. 436, 467 (S.D.N.Y. 2004). The quality of Lead Counsel s efforts in the litigation, together with Lead Counsel s substantial experience in securities class actions and its commitment to the litigation, provided Lead Counsel with the leverage necessary to negotiate the favorable Settlement. Here, the $9.5 million recovery obtained 9

50 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 16 of 23 by Lead Counsel is an excellent result for the Settlement Class in light of the attendant risks of continued litigation discussed above. 4 The skill and substantial experience of counsel in the specialized field of shareholder securities litigation also support the reasonableness of the requested fee. See Teachers Ret. Sys. of La. v. A.C.L.N., Ltd., No. 01-CV-11814, 2004 WL , at *6 (S.D.N.Y. May 14, 2004). Lead Counsel specializes in complex securities litigation, and is highly experienced in such litigation, with a successful track record in securities cases throughout the country. See Firm Resume, Porritt Decl., Ex. 3. Finally, courts consider the quality of the opposition faced by class counsel when assessing the quality of counsel s performance. See, e.g., Marsh, 265 F.R.D. at 148 ( The high quality of defense counsel opposing Plaintiffs efforts further proves the caliber of representation that was necessary to achieve the Settlement ); Veeco, 2007 WL , at *7 (among the factors supporting a 30% award of attorneys fees was that defendants were represented by one of the country s largest law firms ); In re Adelphia Commc ns Corp. Sec. and Derivative Litig., No. 03 MDL 1529, 2006 WL , at *3 (S.D.N.Y. Nov. 16, 2006) ( The fact that the settlements were obtained from defendants represented by formidable opposing counsel from some of the best defense firms in the country also evidences the high quality of lead counsels work ). Here, Lead Counsel was opposed by Covington & Burling LLP, a very skilled and highly respected defense firm representing the Defendants. They spared no effort in the defense of their clients. In the face of this knowledgeable and formidable defense, Lead Counsel was nonetheless 4 As detailed in the Porritt Declaration, a realistic estimate of potential maximum recoverable damages, assuming Plaintiffs prevailed on all of the sustained claims, was approximately $56 million. But those damages would have been reduced or eliminated if the jury accepted Defendants arguments. The recovery of almost 17.3% of the maximum recoverable damages is well above the median recoveries in cases of similar size. As reported by NERA Economic Consulting in 2018, the median of settlement value as a percentage of [ ] investor losses was 4.7% for cases with investor losses between $50 million and $99 million. See Porritt Decl. Ex. 1 at 37, Fig. 28. Additionally, according to a 2018 report by Cornerstone Research, in securities class actions where estimated damages were between $25 million and $74 million, the median recovery was only 6% of estimated damages. See Porritt Decl. Ex. 2 at 8, Fig

51 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 17 of 23 able to develop a case that was sufficiently strong to persuade the Defendants, and their insurance carriers, to settle on terms that are favorable to the Settlement Class. Porritt Decl Second Circuit Precedent Supports the 33% Fee as a Reasonable Percentage of the Total Recovery Courts have interpreted the next factor the requested fee in relation to the settlement as requiring the review of the fee requested in terms of the percentage it represents of the total recovery. When determining whether a fee request is reasonable in relation to a settlement amount, the court compares the fee application to fees awarded in similar securities class-action settlements of comparable value. Comverse, 2010 WL , at *3. As discussed above, the requested 33% fee is well within the range of percentage fees that courts in the Second Circuit, including this Court, and around the country have awarded in class actions. Accordingly, the requested fee is reasonable in relation to the size of the Settlement. See, e.g., City of Austin Police Ret. Sys. v. Kinross Gold Corp., No. 1:12-cv VEC, 2015 U.S. Dist. LEXIS , at *12 (S.D.N.Y. Oct. 15, 2015) (awarded fees of 30% of $33 million recovery, plus expenses); City of Providence v. Aéropostale, Inc., 2014 U.S. Dist. LEXIS 64517, 2014 WL , at *20 (S.D.N.Y. May 9, 2014) (awarding 33% of $15 million settlement); Landmen Partners Inc. v. Blackstone Grp. L.P., No. 08-cv HB-FM, slip op. at 5 (S.D.N.Y. Dec. 18, 2013) (awarded fees of 33-1/3% of $85 million recovery, plus expenses); Bd. of Trs. of the Operating Eng rs Pension Tr. v. JPMorgan Chase Bank, Nat l Ass n, No. 09-cv KBF, slip op. at 1 (S.D.N.Y. Nov. 20, 2013) (awarded fees of 30% of $23 million recovery, plus expenses); Citiline Holdings, Inc. v. istar Fin. Inc., No. 1:08-cv RJS, slip op. at 1 (S.D.N.Y. Apr. 5, 2013) (awarded fees of 30% of $29 million recovery, plus expenses); Fogarazzo v. Lehman Bros. Inc., 2011 U.S. Dist. LEXIS 17747, 2011 WL , *4 (S.D.N.Y. Feb. 23, 2011) (awarding 33.3% of $6.75 million settlement); In re Giant Interactive Grp., Inc. Sec. Litig., 279 F.R.D. 151, 165 (S.D.N.Y. 2001) (awarding 33% of $13 million settlement); In Van Der Moolen Holding N. V. Sec. Litig., 2006 U.S. Dist. LEXIS (S.D.N.Y. Dec. 7, 2006) (awarding 33 1/3% of $8 million settlement) (ECF No. 45) (Ex. 11); Maley v. Del Global Techs. Corp, 186 F. Supp. 2d 358, (S.D.N.Y. 2002) (awarding 33 1/3% of $11.5 million settlement and citing two cases which awarded 33 1/3% 11

52 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 18 of 23 of the settlement amount: In re Apac Teleservs., Inc. Sec. Litig., No. 97 Civ. 9145, slip op. at 2 (S.D.N.Y. June 29, 2001) (Dkt. 54), awarding 33 1/3% of $21 million settlement; and Newman v. Caribiner Int'l Inc., No. 99 Civ (S.D.N.Y. Oct. 25, 2001) (Dkt. 31) (awarding 33 1/3 of $15 million settlement); see also Moloney v. Shelly's Prime Steak, Stone Crab & Oyster Bar, 2009 U.S. Dist. LEXIS 27899, 2009 WL , at *5 (S.D.N.Y. Mar. 31, 2009) (collecting cases awarding over 30% and noting that "Class Counsel's request for 33% of the Settlement Fund is typical in class action settlements in the Second Circuit."); Khait v. Whirlpool Corp., 2010 U.S. Dist. LEXIS 4067, 2010 WL , at *8 (E.D.N.Y. Jan. 20, 2010) (awarding 33% of $9.25 million settlement). 6. Public Policy Consideration Supports the Requested Fee Public policy strongly favors rewarding firms for bringing successful securities actions like this one. See FLAG Telecom, 2010 WL , at *29 (if the important public policy [of enforcing the securities laws] is to be carried out, the courts should award fees which will adequately compensate Lead Counsel for the value of their efforts, taking into account the enormous risks they undertook ); Maley, 186 F. Supp. 2d at 373 ( In considering an award of attorney s fees, the public policy of vigorously enforcing the federal securities laws must be considered. ); Hicks, 2005 WL , at *9 ( To make certain that the public is represented by talented and experienced trial counsel, the remuneration should be both fair and rewarding. ). Accordingly, public policy favors granting Lead Counsel s fee and expense application here. 7. Plaintiffs Approval and the Settlement Class Reaction Support the Requested Fee Plaintiffs were involved in the prosecution and settlement in this Action, and have approved the requested fee. See Declarations of Douglas Drees and Allen Altman. The reaction of the Settlement Class also supports the requested fee. As of June 26, 2017, the Claims Administrator has sent the Notice to 52,185 potential Settlement Class Members and their brokers and nominees (Villanova Decl. 7), informing them that, among other things, Lead Counsel intended to apply to the Court for an award of attorneys fees in an amount not to exceed 33% of the Settlement Amount. Villanova Decl. Ex. A. While the time to object to the fee application does not expire 12

53 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 19 of 23 until July 5, 2018, to date, there has been only one objection and that objection relates to the settlement, not the requested attorneys fees. Villanova Decl. 17. Should any additional objections be received, Lead Counsel will address them in its reply papers. The general lack of objections from Class Members strongly demonstrates their approval of the Settlement and the requested fee award. See, e.g., Veeco, 2007 WL , at *7 ( The lack of objections provides effective evidence of the fairness of the Settlement. ); In re PaineWebber Ltd. P Ships Litig., 171 F.R.D. 104, 126 (S.D.N.Y. 1997) ( the absence of objections may itself be taken as evidencing the fairness of a settlement ) (citation omitted), aff d, 117 F.3d 721 (2d Cir. 1997). D. A Lodestar Cross-Check Confirms the Reasonableness of the Fee Request To ensure the reasonableness of a fee awarded under the percentage-of-the-fund method, the Second Circuit encourages district courts to cross-check the proposed award against counsel s lodestar. See Goldberger, 209 F.3d at 50; Payment Card Interchange Fee, 991 F. Supp. 2d at In cases like this, fees representing multiples of the lodestar are regularly awarded to reflect the contingency-fee risk and other relevant factors. See, e.g., FLAG Telecom, 2010 WL , at *26 ( Under the lodestar method, a positive multiplier is typically applied to the lodestar in recognition of the risk of the litigation, the complexity of the issues, the contingent nature of the engagement, the skill of the attorneys, and other factors. ); Comverse, 2010 WL , at *5 ( Where counsel has litigated a complex case under a contingency fee arrangement, they are entitled to a fee in excess of the lodestar. ). Accordingly, in complex contingent litigation, lodestar multipliers between 2 and 5 are commonly awarded. Indeed, this Court has previously recognized that [a] multiplier of 2.42 is well within the range of lodestar multipliers approved by courts in the Second Circuit, noting that multipliers of 3 to 4.5 to be common. Anwar v. Fairfield Greenwich Ltd., No. 09-CV-118 (VM), 2012 U.S. Dist. LEXIS 78929, at *8 (S.D.N.Y. June 1, 2012). Courts within this district have, when warranted, awarded plaintiffs attorneys fees equal to six (6) times lodestar. See, e.g., In re RJR Nabisco Sec. Litig., No. 88 Civ (MBM),

54 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 20 of 23 U.S. Dist. LEXIS 12702, at *16 (S.D.N.Y. Aug. 24, 1992) (Mukasey, J.) (awarding a percentagebased fee representing 6 times lodestar). 5 Here, a lodestar cross-check fully supports the requested percentage fee. In this entirely contingent action that raised myriad complex issues, Lead Counsel devoted over 2,000 hours of attorney and other professional support time in the prosecution and investigation of the Action. Porritt Decl. at 79. Lead Counsel s total lodestar, derived by multiplying the hours spent by each attorney and paraprofessional by their current hourly rates, is $1,087, Porritt Decl. at The requested fee of 33% of the Settlement Amount will equal $3,166,667 (plus interest), which represents a multiplier of 2.9. Thus, the 33% fee requested is supported by a lodestar cross- 5 See Davis, 827 F. Supp. 2d at 185 (awarding fee representing a multiplier of 5.3, which was not atypical in similar cases); Cornwell v. Credit Suisse Grp., No. 08-cv-03758, DKT No. 117 (S.D.N.Y. July 18, 2011) (awarding fee representing a multiplier of 4.7); Telik, 576 F. Supp. 2d at 590 ( In contingent litigation, lodestar multiples of over 4 are routinely awarded by courts, including this Court. ); In re AremisSoft Corp. Sec. Litig., 210 F.R.D. 109, 135 (D.N.J. 2002) (a 4.3 multiplier was appropriate in light of the contingency risk and the quality of the result achieved); Maley, 186 F. Supp. 2d at 369 (awarding fee equal to a 4.65 multiplier, which was well within the range awarded by courts in this Circuit and courts throughout the country ). 6 As set forth in the Declaration, the hourly rates are the same as, or comparable to, the rates submitted by my firm for lodestar cross-checks in other securities class action litigation for fee applications that have been granted within this Circuit and nationwide. See, e.g., In re Credit Default Swaps Antitrust Litig., No. 13MD2476 (DLC), 2016 U.S. Dist. LEXIS 54587, 2016 WL , at *17 (S.D.N.Y. Apr. 26, 2016) (granting a fee award amounting to a lodestar multiplier of six, in a case where a successful, international law firm cited partner rates of $834 to $1,125 and associate rates of $411 to $714); City of Providence, 2014 U.S. Dist. LEXIS 64517, 2014 WL , at *13 (finding partner rates of $640 to $875 and non-partner attorney rates of $335 to $725 to be line with defense firms). Both the Supreme Court and courts in this Circuit have long approved the use of current hourly rates to calculate the base lodestar figure as a means of compensating for the delay in receiving payment that is inherent in class actions, inflationary losses, and the loss of access to legal and monetary capital that could otherwise have been employed had class counsel been paid on a current basis during the pendency of the litigation. See In re Union Carbide Corp. Consumer Prods. Bus. Sec. Litig., 724 F. Supp. 160, 163 (S.D.N.Y. 1989); Veeco, 2007 WL , at *9; Missouri, 491 U.S. at

55 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 21 of 23 check. 7 Lead Counsel s requested 33% fee is well within the range of what courts in this Circuit and throughout the country commonly award in complex class actions such as this, when calculated as a percentage of the fund, and pursuant to a lodestar cross-check. E. Lead Counsel s Litigation Expenses are Reasonable and Should Be Approved for Reimbursement Lead Counsel s fee application includes a request for reimbursement of Litigation Expenses that were reasonably incurred in furtherance of the claims on behalf of the Settlement Class. These expenses are documented expenses properly recovered by counsel. See, e.g., In re China Sunergy Sec. Litig., No. 07 Civ. 7895, 2011 WL , at *6 (S.D.N.Y. May 13, 2011) (in a class action, attorneys should be compensated for reasonable out-of-pocket expenses incurred and customarily charged to their clients, as long as they were incidental and necessary to the representation ); FLAG Telecom, 2010 WL , at *30 ( It is well accepted that counsel who create a common fund are entitled to the reimbursement of expenses that they advanced to a class. ). As set forth in detail in the Porritt Declaration, Lead Counsel requests reimbursement of $199, in expenses for prosecuting the Action for the benefit of the Settlement Class, to be paid out of the Settlement Amount. The expenses are the types that are necessarily incurred in litigation and routinely charged to clients billed by the hour. These expenses include expert fees, mediation costs, travel expenses, photocopying, telephone charges for long distance or conference calls, postage and delivery expenses, and filing fees and notices. See Porritt Decl. at The 7 See, e.g., Van Vranken v. Atlantic Richfield Co., 901 F. Supp. 294, 298 (N.D. Cal. 1995) ( Multipliers in the 3-4 range are common in lodestar awards for lengthy and complex class action litigation. ); see also Steinver v. Am. Broad Co., 248 F. App x 780, 783 (9th Cir. 2007) (approving a percentage fee award that corresponded to a multiplier of 6.85); Buccellato v. AT&T Operations, Inc., No , 2011 U.S. Dist. LEXIS 85699, at *3-*5 (N.D. Cal. June 30, 2011) (finding a multiplier of 4.3 was reasonable); Craft, 624 F. Supp. 2d at 1125 (approving a fee award that corresponded to a multiplier of 5.2); In re Enron Corp. Sec., Deriv. & ERISA Litig., 586 F. Supp. 2d 732 (S.D. Tex. 2008) (5.2 multiplier); In re Rite Aid Corp. Sec. Litig., 146 F. Supp. 2d 706 (E.D. Pa. 2001) (multipliers of ); Roberts v. Texaco, Inc., 979 F. Supp. 185, 198 (S.D.N.Y. 1997) (5.5 multiplier). 15

56 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 22 of 23 majority of the expert fees were attributable to Plaintiffs expert economist, who assisted Lead Counsel in developing their arguments for class certification. In particular, Lead Counsel needed the expert to demonstrate that Resource Capital s securities traded in an efficient market, a requirement for triggering the fraud on the market presumption applicable in securities fraud cases which was an issues on class certification. The Notice informed potential Settlement Class Members that Lead Counsel would apply for reimbursement of its Litigation Expenses in an amount not to exceed $200, Villanova Decl., Ex. A. The expenses actually requested, $199,463.67, are in line with the amount stated in the Notice. To date, no Settlement Class Member has objected to the request for reimbursement of expenses. F. Plaintiffs Should Be Awarded Incentive Awards Courts in this Circuit routinely award... costs and expenses both to reimburse the named plaintiffs for expenses incurred through their involvement with the action and lost wages, as well as to provide an incentive for such plaintiffs to remain involved in the litigation and to incur such expenses in the first place. In re Bear Stearns Companies, Inc. Sec., Derivative, & ERISA Litig., 909 F. Supp. 2d 259, (S.D.N.Y. 2012) (citing Hicks, 2005 WL , at *10); Facebook, 2015 WL , at *12. Lead Counsel have requested incentive awards of $10,000 for Lead Plaintiff Douglas Drees and $5,000 for Plaintiff Allen Altman for collecting and producing relevant documentation and information, appearing for depositions, reviewing pleadings, and approving settlement. Each Plaintiff committed time to the prosecution of this lawsuit, as evidenced by their respective declarations. The incentive awards they seek are reasonable under the circumstances. Indeed, in this District, incentive awards in the $10,000 range have been found to be reasonable. See, e.g., Dupler v. Costco Wholesale Corp., 705 F. Supp. 2d 231, (E.D.N.Y. 2010) (awarding $25,000 to the lead plaintiff in a consumer class action and $5,000 to another plaintiff), citing In re Currency Conversion Fee Antitrust Litig., 263 F.R.D. 110, 131 (S.D.N.Y. 2009), aff'd sub nom. Priceline.com, Inc. v. Silberman, 405 F. App'x 532 (2d Cir. 2010) (finding that incentive awards 16

57 Case 1:15-cv LLS Document 85 Filed 06/29/18 Page 23 of 23 of $45,000, $35,000, and lesser amounts were "within the range of what other courts have found to be reasonable, although on the higher end," and awarding $15,000 to the lead plaintiff); Dornberger v. Metro. Life Ins. Co., 203 F.R.D. 118, (S.D.N.Y. 2001) (approving an incentive award of $10,000 for class member). Such awards encourage the public policy goal of private prosecution securities frauds as described above. See Tellabs, 551 U.S. at 313 (citations omitted). Moreover, no objections to the incentive awards have been made. Accordingly, the incentive awards should be approved as reasonable. III. CONCLUSION Lead Counsel respectfully requests that the Court award attorneys fees of 33% of the Settlement Amount; $199, in Lead Counsel s litigation expenses; and $10,000 for Lead Plaintiff Douglas Drees and $5,000 for Additional Plaintiff Allen Altman as incentive awards to Plaintiffs. DATED: June 29, 2018 Respectfully submitted, By: /s/ Adam Apton. Nicholas I. Porritt Adam M. Apton LEVI & KORSINSKY, LLP th Street NW, Suite 115 Washington, DC Telephone: Facsimile: Attorneys for Plaintiffs Douglas Drees and Allen Altman and Lead Counsel for the Class 17

58 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 1 of 25 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, v. Plaintiffs, Docket No.: 1:15-cv LLS Hon. Louis L. Stanton DECLARATION OF NICHOLAS I. PORRITT RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Defendants. I, Nicholas I. Porritt, hereby declare as follows: 1. I am a partner at the law firm of Levi & Korsinsky, LLP, counsel for Plaintiffs Douglas Drees and Allen Altman ( Plaintiffs ) in the above-captioned matter. I submit this Declaration in support Plaintiffs Motions for: (i) Final Approval of Class Action Settlement and Plan of Allocation of Settlement Proceeds; and (ii) an Award of Attorneys Fees, Reimbursement of Litigation Expenses, and Incentive Awards. Unless otherwise defined, capitalized terms in this declaration will have the same meaning as set forth in the Stipulation of Settlement, dated as of February 5, 2018 (the Settlement or the Stipulation ) (Dkt. No. 78). 2. I have personal knowledge of the various matters set forth herein based on my dayto-day participation in the prosecution and settlement of this Action, and, if called as a witness, could and would testify completely thereto. Additionally, as the senior attorney directing the prosecution of this matter, I have a detailed understanding of the efforts of other attorneys who have worked on the Action. Additional matters are attested to, via separate declarations, by the 1

59 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 2 of 25 claims administrator in this case, Epiq Class Action & Claims Solutions, Inc. ( Epiq ), as well as Plaintiffs Douglas Drees and Allen Altman. I. INTRODUCTION 3. Plaintiffs seek final approval of the proposed Settlement as well as an award of attorneys fees, reimbursement of litigation expenses, and incentive awards. The Settlement creates a common fund of $9.5 million and represents an outstanding recovery for shareholders of Resource Capital Corp. ( Resource Capital ). These shareholders, who sustained financial damages as a result of Defendants alleged fraudulent conduct, will receive a significant percentage of their market losses, which were estimated at $56 million. Indeed, the settlement fund created here is almost double the settlement fund typically created in securities class action cases of this size. To date, there has been just one objection to the proposed Settlement, which is a testament to its benefits. Plaintiffs respectfully request that the Settlement be approved in final. 4. Plaintiffs also respectfully ask that the Court approve the requested fee, expense, and incentive awards. My firm, Levi & Korsinsky, commenced this action on September 9, From that point on, Levi & Korsinsky s attorneys ligated this case vigorously for approximately two and a half years before agreeing to the proposed Settlement on February 5, The firm invested more than 2,000 hours (worth over $1 million at market billing rates) and incurred almost $200,000 in out-of-pocket expenses that have yet to be reimbursed. In exchange, Levi & Korsinsky was able to defeat a difficult motion to dismiss, obtain discovery, take and defend party and expert depositions, secure class certification, and effectively resolve the matter through mediation. Levi & Korsinsky s efforts resulted in an extraordinary result for the Class and, as such, justify the standard award of 33% of the recovery, or $3,166, Levi & Korsinsky s success is also attributable, in part, to the assistance of their clients, Plaintiffs Douglas Drees and Allen Altman. Douglas Drees was the court-appointed Lead Plaintiff in this case. He faithfully upheld his responsibilities and, on frequent occasion, provided sophisticated analysis of Resource Capital s operations and finances in support of Plaintiffs claims. He and Allen Altman also served as Class Representatives for the purposes of Class 2

60 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 3 of 25 Certification. They took their fiduciary obligations seriously and helped obtain the proposed Settlement, spending dozens of hours of their personal time in the process. In exchange for their efforts, Plaintiffs seek incentive awards in their favor of $10,000 and $5,000, respectively. II. BACKGROUND A. LITIGATION 6. On August 4, 2015, Resource Capital announced that it was recording a $41.1 million allowance for loan losses on a mezzanine loan it held in one of its portfolios. The losses were, according to Resource Capital, caused by a decline in the value of the underlying collateral for the mezzanine loan which consisted of luxury hotels in or around San Juan, Puerto Rico. The market and Resource Capital investors were surprised and disappointed by this announcement and sold Resource Capital stock in large volume immediately following the announcement. Resource Capital s stock price declined $0.43 per share, or 12%. Levi & Korsinsky began investigating the matter immediately, as Puerto Rico s economy had been in decline for some time and, therefore, the collateral at issue had likely declined in value long before the August 4 announcement. Due to the significance of this mezzanine loan to Resource Capital s portfolio and the regular reviews of its collateral that Resource Capital undertakes, it also appeared likely that Resource Capital management knew of the risks presented by this mezzanine loan. This suggested that Resource Capital had intentionally concealed its exposure to Puerto Rico from the market in violation of the federal securities laws. 7. Our investigation accumulated enough facts to warrant the filing of a class action complaint. On September 9, 2015, my firm filed a class action complaint, styled Levin v. Resource Capital Corp. et al, 1:15-cv LLS, against Defendants asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act ) and Rule 10b As a class action lawsuit alleging claims under the Exchange Act, the matter was subject to the Private Securities Litigation Reform Act of 1995 (the PSLRA ). The PSLRA modified the Exchange Act in 1995 by, among other things, requiring courts to appoint lead 3

61 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 4 of 25 plaintiffs at the outset of all class action lawsuits subject to the PSLRA. 9. Levi & Korsinsky, along with our client Douglas Drees, moved for appointment as lead plaintiff and lead counsel. Two other Resource Capital shareholders and their attorneys filed motions seeking the same relief. Under the terms of the PSLRA, Mr. Drees was presumed to be the most adequate plaintiff among the movants because he had the greatest financial interest in the Action due to his out-of-pocket losses of almost $350,000. On November 24, 2015 the Court appointed Douglas Drees as the lead plaintiff and Levi & Korsinsky as lead counsel. 10. Over the course of the next three months, Levi & Korsinsky continued its investigation into Resource Capital, its disclosures about the Puerto Rico mezzanine loan, and its impairment. The investigation uncovered significant facts concerning the collateral that had been securing the mezzanine loan. On February 12, 2016, Plaintiff Douglas Drees filed an amended complaint alleging additional factual information in support of the claims against Defendants (the Amended Complaint ). 11. The claims asserted in the Amended Complaint were still based on Defendants failure to disclose the risks created by the mezzanine loan that was collateralized by real estate assets in Puerto Rico. This information was material to the market because investors would have considered it (i.e., the risk of loss arising from Puerto Rican real estate) when deciding whether or not to purchase stock. The Amended Complaint alleged that the trading price of Resource Capital s securities was artificially inflated during the Class Period because of this material misrepresentation and/or omission and stockholders who bought during the Class Period were thereby damaged. 12. Levi & Korsinsky obtained the information supporting these allegations from a thorough investigation. The investigation included reviewing almost three years of Resource Capital s filings with the SEC and public statements in press releases and conference calls. The investigation also included reviewing material about the company, such as analyst reports and information readily available on the internet. Finally, the investigation also included interviewing former employees of the company. 4

62 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 5 of Defendants moved to dismiss the Amended Complaint under Rule 12(b)(6) for failure to state a claim. These motions are standard in these types of cases because the PSLRA, in addition to providing rules concerning lead plaintiffs, requires plaintiffs to plead their claims with a very high level of specificity. Defendants motion argued that Plaintiff had failed to meet this level of specificity and, therefore, had not sufficiently pleaded a claim of securities fraud under the Exchange Act. 14. The parties spent approximately three months briefing the motion to dismiss. On October 5, 2016, the Court denied Defendants motion. The Court held that Plaintiff had adequately pleaded that Defendants made misleading statements about the mezzanine loan to the public and, for that reason, were potentially in violation of the Exchange Act. 15. Following the Court s decision, we were approached by counsel for Allen Altman, a purchaser of Resource Capital preferred shares. The Amended Complaint only asserted claims on behalf of purchasers of Resource Capital common stock. After discussions with Mr. Altman and his counsel and reviewing the relationship between the markets for Resource Capital preferred shares and common stock, we determined that there was no conflict of interest between the two sets of Resource Capital investors who had each suffered losses as a result of the same alleged misconduct by Defendants. We determined that it would be appropriate and efficient for a class of purchasers of Resource Capital preferred shares to be added to this Action. We also determined that Mr. Altman would be a suitable class representative for the class of preferred stock purchasers. Mr. Altman and the class of preferred stock purchasers were later added in a further amended complaint. We also agreed that, to the extent we were successful in obtaining a recovery for the purchasers of Resource Capital preferred stock, we would compensate Mr. Altman s counsel for the time and expenses it had incurred in representing him. 16. Also following the Court s decision, but prior to beginning discovery, the parties agreed to participate in a private mediation session in an attempt to resolve the matter on an expedited basis and without incurring the costs and expenses typically associated with enduring litigation matters. The parties scheduled the mediation for April 10, In advance, Defendants 5

63 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 6 of 25 provided Plaintiff with a limited set of documents containing Resource Capital s portfolio reports showing how the company rated the mezzanine loan internally in terms of creditworthiness. We relied upon these documents (and others) in drafting a thorough mediation brief outlining the relative strengths and weaknesses of Plaintiff s claims. We also engaged a financial expert who performed an analysis to derive a preliminary estimate of class-wide damages, using methodologies that have been generally accepted by the federal courts. This analysis indicated potential class-wide damages of approximately $56 million. This included both Resource Capital common stock and preferred stock. Counsel for all parties, as well as representatives from Resource Capital s insurance carriers, attended the all-day mediation session on April 10, 2017 before mediator Robert A. Meyer, Esq. of JAMS. The mediation was, unfortunately, not successful. 17. The parties proceeded to discovery in earnest following the failed attempt at mediation. Initial deadlines in the case included deadlines to exchange initial disclosures under Rule 26. Plaintiff s initial disclosures identified numerous areas of information that would be relevant in discovery, including the analysis and evaluation of loan positions, risk exposure in Puerto Rico, the mezzanine loan at issue, and corporate financing. Plaintiff also identified a number of third-parties likely to have information, including Moody s, Blackstone, and Fitch Ratings. Defendants identified Jonathan Cohen, David Bryant, Eldron Blackwell, David Bloom, and Brad Hoffman as individuals likely to have relevant information as well as identified categories of documents in their possession that Defendants may use to support their claims or defenses. 18. The parties also served requests for production upon each other. Plaintiff s requests for production included: information relating to identifying the names, roles, and responsibilities of Resource Capital s employees and any third-parties retained by or on behalf of Resource Capital for services relating to the mezzanine loan; documents related to the acquisition of the mezzanine loan; documents related to the evaluation of the mezzanine loan at the time of purchase and through the relevant period; documents relating to Resource Capital s public disclosures; and documents 6

64 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 7 of 25 and communications relating to Resource Capital s share price, including communications with analysts or investors. Defendants requested a number of documents, including all documents described in Plaintiff s initial disclosures as well as all documents relating to the mezzanine loan, Plaintiff s investment in Resource Capital, the Puerto Rican economy, the efficiency or lack of efficiency of the market for Resource Capital s stock. 19. Mr. Drees produced documentary discovery in response to Defendants requests for production, including account statements and trade confirmations relating to his purchases and sales of Resource Capital stock. He had a number of accounts with many different transactions. The total amount of documents produced by Mr. Drees was substantial; indeed, he produced 3,819 pages of brokerage statements alone. 20. Resource Capital produced 119,887 pages of documents. These documents included financial documents, board minute meetings, s, contracts and agreements, affidavits and certificates, reports on various topics, including the Puerto Rican economy and troubled debt restructuring, insurance documents, and drafts of SEC filings. 21. Plaintiff also engaged in substantial non-party discovery. In the course of just three months, Plaintiff served six non-party subpoenas for the production of documents. These subpoenas were served upon, among others, Moody s, Fitch Ratings, and Grant Thornton LLP. In total, the non-parties produced 51,139 pages of discovery. Critical to Plaintiff s claims was the creditworthiness of the mezzanine loan and whether and to what extent Resource Capital knew that the collateral underlying the mezzanine loan was declining in value. 22. Discovery revealed that the collateral underlying the mezzanine loan (i.e., the real estate in Puerto Rico) had been declining in value for several years prior to Resource Capital s August 4 disclosure. The mezzanine loan was subordinate to a secured financial investment (referred to as a certificate ) that was part of a larger real estate investment trust. Ratings companies like Moody s and Fitch Ratings had been downgrading the certificates for years prior to August 4, 2015; given that the collateral was the same for both the certificates and Resource Capital s mezzanine loan, it followed that the rating of the mezzanine loan tracked the ratings of 7

65 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 8 of 25 the certificate. Accordingly, the ratings for the certificates served as a proxy for the ratings of the mezzanine loan (which were not publicly rated by the rating agencies). 23. Notwithstanding the public ratings of the certificates, Resource Capital s internal documents appeared to support the company s conclusion that an impairment of the mezzanine loan was not necessary until shortly before the August 4 announcement. Levi & Korsinsky retained an expert in the area of real estate financing and troubled debt restructurings in an effort to evaluate Resource Capital s reasoning and, importantly, help determine whether and when Resource Capital should have taken the impairment at issue in the lawsuit. Following an analysis of the discovery received, it appeared that there was no precise date at which the impairment should have been taken, thus leaving one of the most critical issues in the case open to the decision of a jury. 24. At the same time we were engaging in merits discovery, the parties were also engaging in class certification discovery. Plaintiff intended to seek class certification on behalf of common stockholders as well as stockholders of certain preferred stock. The deadline for Plaintiff to seek class certification was June 2, 2017 and, prior to that date, Plaintiff filed the Second Amended Complaint identifying the preferred stockholders as a subclass being represented by Plaintiff Allen Altman. Mr. Altman served as our named plaintiff and prospective class representative. In addition to being deposed, Mr. Altman produced 3,264 pages of documents (primarily consisting of brokerage statements). On June 2, 2017, Plaintiffs moved for certification of classes consisting of Resource Capital s common and preferred stockholders. 25. Plaintiffs engaged an expert economist for assistance with their class certification motion. A key issue in terms of obtaining class certification was whether Plaintiffs could avail themselves of the fraud on the market presumption (which alleviates Plaintiffs of having to prove reliance in support of their claims under the Exchange Act). To trigger the presumption, Plaintiffs had to show that the market for Resource Capital s securities was efficient. Plaintiffs were able to do this by submitting an event study from their expert in support of the motion for class certification. 26. In response to Plaintiffs motion for class certification, Defendants deposed 8

66 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 9 of 25 Plaintiffs expert in addition to both Plaintiffs (Drees and Altman). Defendants also relied on an expert of their own to counter Plaintiffs arguments. Defendants argued in opposition that, while the market for Resource Capital s securities may have been efficient, Plaintiffs were not deserving of class certification because Plaintiffs were inadequate representatives and individual questions concerning class members damages created insurmountable predominance problems under Rule 23. Specifically, Defendants argued that a uniform calculation of damages for all class members was not possible because Resource Capital s stock was inflated by varying amounts at different points in the Class Period. 27. Plaintiffs replied to Defendants opposition. In support of the reply, Plaintiffs submitted testimony from the deposition of Defendants expert (whom I deposed) and supplemental testimony in the form of a declaration from Plaintiffs expert. We argued that Defendants concerns about predominance were overstated and that, under the law, our evidentiary showings were sufficient for the purposes of obtaining class certification. The Court agreed and granted class certification on November 22, B. SETTLEMENT 28. Certification of the Class changed the dynamics of the case. Shortly after the Court s order, the parties each spoke with Mr. Meyer, the mediator who had moderated the early mediation attempt following the motion to dismiss proceedings. Those conversations resulted in Mr. Meyer issuing a mediator s proposal whereby Defendants would pay $9.5 million to resolve all claims arising out of the litigation. 29. Plaintiffs accepted the mediator s proposal after due consideration. While Plaintiffs had been victorious in obtaining class certification, they still faced problems with respect to liability. The timing of the impairment was subject to debate and, in all likelihood, needed to be decided by a jury. Summary judgment was not likely to resolve the lawsuit in light of the factual issues at hand. Accordingly, trial would have been necessary. The expense and uncertainty involved with this outcome was enough to justify the settlement, especially given the fact that the 9

67 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 10 of 25 settlement represented an approximate 17% recovery of total damages ($9.5 million recovery relative to total overall estimated damages of $56 million). The median settlements in cases of this size typically range between 5% and 8%, according to the two leading economic consulting firms that monitor and analyze securities class action damages and settlements (discussed further below). 30. Defendants also accepted the mediator s proposal. From there, the parties promptly began documenting the Settlement. This included drafting the stipulation of settlement, the class notice, the summary notice, the claim form, and the proposed orders granting preliminary and final approval. The parties signed the Stipulation on February 5, C. PRELIMINARY APPROVAL OF THE SETTLEMENT 31. Plaintiffs filed the motion for preliminary approval of the Settlement on February 5, The Court granted the motion on April 3, 2018 and, at that time, entered the Preliminary Approval Order holding, inter alia, that the settlement was appropriately within the range of reasonableness for preliminary approval, permitting the parties to proceed with notice to the class, and scheduling a hearing for final approval. The Court set the Final Approval Hearing for August 3, 2018, at 12:00 p.m. III. SUMMARY OF THE SETTLEMENT AND NOTICE TO THE CLASS A. SUMMARY OF THE SETTLEMENT AND THE PLAN OF ALLOCATION 32. The Settlement Fund is an all-in settlement number, valued at $9,500,000, meaning that it includes all attorneys fees, administration costs, expenses, class member benefits, as well as any other costs, expenses, or fees of any kind whatsoever associated with the resolution of the Action. 33. The Class consists of all persons or entities who purchased or otherwise acquired a legal or beneficial ownership interest in Resource Capital Common Shares, Series B Preferred Shares, or Series C Preferred Shares between October 31, 2012 and August 5, The Settlement Fund is to be distributed on a pro rata basis pursuant to the Plan of Allocation to those Class Members submitting valid claims (the Authorized Claimants ). As set 10

68 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 11 of 25 forth in the Notice, the Claims Administrator shall determine each Authorized Claimant s pro rata share of the Settlement Fund (approved costs, fees and expenses) based upon each Authorized Claimant s Recognized Claim. 35. The proposed Plan of Allocation is based upon the premise that Class Members sustained damages by purchasing their stock at artificially inflated prices. Accordingly, the proposed Plan of Allocation seeks to compensate Class Members in accordance with the amount by which the price of Resource Capital s stock declined upon dissemination of curative disclosures into the market. 36. To explain, Plaintiffs alleged that Defendants concealed the risk of a mezzanine loan position involving real estate assets in Puerto Rico. When Defendants finally announced that Resource Capital was impairing the loan by $41.1 million, the trading price of Resource Capital s common stock plunged from its closing price of $3.48 on August 4, 2015, to close at $3.05 on August 5, 2015, a single-day loss of more than 12%, on extremely heavy trading. (The price of Resource Capital s Series B and C preferred stock declined as well, with the Series B shares falling from $19.90 per share to $18.25 per share and Series C shares falling from $20.56 per share to $18.77 per share during the same period.) 37. Under the Plan of Allocation, Class Members who purchased shares during the Class Period and held at the close of trading on August 5, 2015 will claim a Recognized Loss of $0.43/share for common stock, a Recognized Loss of $1.65/share for Series B preferred stock, and a Recognized Loss of $1.79/share for Series C preferred stock (i.e., the amounts by which each class of stock declined in response to Resource Capital s August 4 disclosure). 38. This Plan of Allocation is fair and reasonable. It treats all Class Members the same in terms of losses. It also makes for manageable class administration, as each Class Member s Recognized Loss can be easily determined without regard to the amounts at which they purchased or sold their shares (as some Plans of Allocation do). Once each Class Member s Recognized Loss is calculated, pro rata distributions will be determined based upon the claims submitted by 11

69 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 12 of 25 dividing each Class Member s Recognized Loss by the total Recognized Loss of the claims submitted by the Class. B. NOTICE OF THE SETTLEMENT 39. Pursuant to the Court s Preliminary Approval Order, Levi & Korsinsky implemented a comprehensive notice program with the assistance of the Claims Administrator, Epiq. Epiq provided notice to the Class by mail and publication. Epiq also maintained (and continues to maintain) an internet website providing all pertinent information to the public (including the notice documents). 40. The Notice, which the Court approved in conjunction with Plaintiffs Motion for Preliminary Approval, contained, inter alia: (a) the amount and makeup of the Settlement Fund; (b) the Plan of Allocation; (c) that Levi & Korsinsky would apply for a fee award in an amount not to exceed 33% of the Settlement Fund, reimbursement of expenses incurred prosecuting this Action in an amount not to exceed $200,000, and incentive awards for Douglas Drees and Allen Altman in the amount of $10,000 and $5,000, respectively; (d) that any Class Member could object to the Settlement and/or fee and expense application or seek exclusion from the Class; (e) the date, time, and location of the Final Approval Hearing and that Class Members have the right to attend and be heard; and (f) that the deadline for filing Proofs of Claim is July 23, As of June 26, 2018, an aggregate of 52,185 copies of the Notice Packet have been disseminated to potential Class Members by the Claims Administrator. 42. In addition, the Claims Administrator established and continues to maintain a tollfree telephone number to accommodate potential Class Members with questions about the Settlement. As of June 26, 2018, the Claims Administrator has received or placed a total of 386 calls (3,916 minutes) to the telephone hotline for assistance. 43. Furthermore, since April 16, 2018, the Claims Administrator has established and maintained a website dedicated to the Settlement ( to provide additional information to Class Members. Website users can access and download 12

70 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 13 of 25 copies of the Notice, Summary Notice, Proof of Claim, Stipulation, and the Preliminary Approval Order. 44. Pursuant to the Order of Preliminary Approval, Epiq caused the Summary Notice to be transmitted over PR Newswire, a national business-oriented newswire service, on April 17, All requests for exclusion from the Class and objections to the Settlement, the Plan of Allocation and the Fee Request are required to be filed no later than July 5, 2018 and July 13, 2018, respectively. 46. As of June 29, 2018, there has been one objection concerning the Settlement. We have spoken with the objector who advises that its objection is primarily directed at the behavior of Defendants and not to the conduct of Plaintiffs counsel during the course of the litigation. The objector has not opted out of the Settlement and has already submitted its claim form to receive its distribution as a class member. The objector does not object to the Plan of Allocation or request for attorneys fees and expenses. There have not been any requests for exclusion from the Settlement. IV. THE SETTLEMENT MEETS THE SECOND CIRCUIT S STANDARD FOR FINAL APPROVAL A. THE PARTIES WERE ABLE TO ASSESS THE STRENGTHS AND WEAKNESSES OF THEIR CASES 47. Levi & Korsinsky, in furtherance of the Class s claims, undertook an extensive investigation, including interviews of former employees and review of a substantial record of public records regarding Resource Capital s business. My firm also conducted extensive party and non-party discovery. In total, we received and reviewed over 171,000 pages of documents pertaining to the mezzanine loan and its creditworthiness. 48. These documents included workbooks from Resource Capital s auditor, statements from the credit rating agencies, and internal correspondence from Resource Capital all relating to 13

71 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 14 of 25 the mezzanine loan and how it should be treated in terms of its creditworthiness. With this information, we were able to consult with a highly regarded expert in the field of real estate financing and troubled debt restructurings and receive acute guidance pertaining to whether Resource Capital acted appropriately under the circumstances. 49. As a result of this research and investigation, we had a comprehensive understanding of the strengths and weaknesses of the case and were able to make an informed decision concerning the fairness of the Settlement prior to its presentation to this Court. B. THE SETTLEMENT APPROPRIATELY BALANCES THE RISK OF LITIGATION AND THE BENEFIT TO THE CLASS OF A CERTAIN RECOVERY 1. Continued Litigation Posed Substantial Risks in Establishing Liability 50. As discussed previously, our investigation and research ultimately revealed that Resource Capital s treatment of the mezzanine loan was debatable. Evidence showed that the mezzanine loan should have been impaired, but the exact date on which it should have been impaired was a factual issue requiring a jury to resolve. Although I believe that our presentation of the facts would have been persuasive (and ultimately successful at trial), Defendants could have offered potentially effective arguments of their own in their defense to Plaintiffs claims. Of course, to this day, Defendants continue to deny all liability and wrongdoing and would have continued to do so through summary judgment proceedings at trial. 51. A complex case such as this would have resulted in a prolific amount of documents being produced about Resource Capital s treatment of the mezzanine loan over an extended, multiple-year period. The parties would have ultimately had to take numerous party and non-party depositions which, although they would have been informative, likely would not have been able to definitively prove fraud as a matter of law. Accordingly, I considered the Settlement to be a favorable result in light of the risks of additional litigation (including potentially losing summary judgment, receiving an adverse ruling on a motion in limine, or losing at trial). 14

72 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 15 of The Settlement provides a significant and immediate recovery, without the further risk, expense and delay that continued litigation would bring. 2. Continued Litigation Posed Substantial Risk in Proving Damages 53. Even if we prevailed in establishing falsity and scienter, Plaintiffs would have had to prove loss causation (i.e., that Defendants' misconduct caused the damages claimed). While I believe Plaintiffs could have overcome any arguments or defenses based on causation and damages, there was certainly no assurance that the jury would agree with Plaintiffs arguments. 54. Defendants had raised certain arguments in opposition to our class certification motion that could have proved persuasive later in the litigation; namely, that the price of Resource Capital s stock was allegedly inflated by different amounts at various points during the Class Period and that the decline in Resource Capital s stock following the August 4 disclosure was not necessarily indicative of the classwide damages, if any. While we would have been able to rebut this argument with expert testimony of our own, a jury might not have agreed with our view on the issue. 55. Proof of damages would have been extremely complex and involve considerable risk for Plaintiffs. Proof of damages and causation in a ''fraud-on-the-market" case like this entails a degree of complexity and sophistication that, in itself, is a risk to Plaintiffs ability to carry their burden of proving damages at trial. As such, the damages valuations proffered by Plaintiffs and Defendants would have likely varied significantly. 56. The continued risks of litigation, including proving damages, weighed in favor of accepting the Settlement. 3. Collectability Risks to the Class 57. Class action cases like this one can endure for years on end. If Plaintiffs were successful, Defendants could still appeal certain issues. While Resource Capital appeared sound from a financial point of view, real estate has been volatile at times and the company could have potentially fell upon hard times. The Settlement allows for payment now and, however unlikely a bankruptcy could have been, eliminates any risks of collectability. 15

73 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 16 of Balancing the Certainty of an Immediate Recovery Against the Expense and Likely Duration of Protracted Litigation Favors Settlement 58. Final approval of the Settlement will result in an immediate recovery for the eligible claimants. If the Action was to proceed rather than settle, formal discovery would have been costly and time-consuming. In addition, motions for summary judgment would likely have been filed. Even if Plaintiffs were successful in the litigation, appeals would have ensued and resulted in additional delay. It would likely be years before Class Members would have received any recovery. The Settlement is in the best interests of the Class. C. THE SETTLEMENT AMOUNT OF $9,500,000 IS AN EXTRAORDINARY RECOVERY AND WEIGHS HEAVILY IN FAVOR OF APPROVAL OF THE SETTLEMENT 59. Before representing to the Court that the Settlement is fair, reasonable, and adequate, I evaluated the prospects of obtaining a better result at trial one that would also have to withstand later attack on appeal. 60. With assistance from our expert economist, we estimated potential recoverable damages for the Class to be approximately $56 million ($50 million for common stock and $6.5 million for Series B and C preferred stock combined). The Settlement, therefore, represents almost 17% of the total damages that could have been recovered if Plaintiffs were completely successful on all issues of liability and damages in the Action. 61. This percentage of recovery is extraordinary. Compared to other class action securities lawsuit settlements in cases with similar damages, the proposed Settlement is far and away better than most. NERA Economic Consulting and Cornerstone Research, the two leading economic firms that track and monitor class action settlements, issue annual reports. These reports provide statistics about class action settlements in securities fraud cases. For the period 1996 through 2017, the median settlement value as a percentage of investor losses in cases with damages 16

74 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 17 of 25 between $50 million and $99 million was 4.7%, according to NERA. For the period 2008 through 2016, Cornerstone calculated a median settlement percentage of 8.2% for cases with damages between $25 million and $74 million; when considering just 2017 alone, the percentage was only 6.0%.True and accurate copies of these reports are attached hereto as Exhibits 1 and 2, respectively. The relevant information in the NERA report is located in Figure 28 on page 37 and in the Cornerstone report in Figure 7 on page While 17% of damages is less than a complete recovery, achieving success on all issues of damages and liabilities is extremely unlikely. Accordingly, the size of the recovery in light of the obstacles Plaintiffs would have faced through trial make the Settlement very favorable for the Class. D. THE PLAN OF ALLOCATION IS FAIR AND REASONABLE 63. In order to develop a fair plan of allocation, we consulted with our expert economist and Epiq in terms of how to best compensate the Class Members who submitted approved claims. The Plan of Allocation described in the Notice is the product of those discussions. I believe it is best suited to compensate all Class Members equally while at the same time reducing claims administration costs. The Plan of Allocation is also relatively easy to understand (compared to plans of allocation that have been utilized in other class action cases). 64. The Plan of Allocation provides Class Members with a fixed amount based upon the number of shares they held at the end of the Class Period. The Plan of Allocation, like Plaintiffs estimate of Class-wide damages itself, assumes complete success on all aspects of liability and damages at trial and post-trial appeals. Thus, the Plan of Allocation credits all Class Members with the best possible result they could have achieved based on the number of Resource Capital shares they held when Resource Capital announced the impairment on August 4, This analysis was, at the time the Settlement was reached, the best estimate of damages that Plaintiffs had and is still the analysis that Plaintiffs would likely have presented to the trier of fact. 17

75 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 18 of 25 V. LEVI & KORSINSKY S REQUEST FOR ATTORNEYS FEES, REIMBURSEMENT OF EXPENSES, AND INCENTIVE AWARDS FOR PLAINTIFFS A. THE FEE APPLICATION 65. As compensation for our efforts, Levi & Korsinsky is applying for an award of attorneys fees in the amount of 33% of the Settlement Fund ($3,166,667.67) and reimbursement of $199, in expenses reasonably incurred in the prosecution and settlement of the Action. The amount of the expenses is less than the amount of $200,000 published in the Notice sent to all Class Members. My firm has prosecuted this case for almost three years without any compensation and has incurred thousands of dollars in expenses without any guarantee of success. 66. The fee request is within the range of fees awarded by courts in the Second Circuit, as further detailed and discussed the legal memorandum submitted in support of Plaintiffs motion. B. THE SETTLEMENT ACHIEVED 67. Levi & Korsinsky has succeeded in obtaining a $9.5 million cash settlement, plus interest. The benefit to the Class represents almost 17% of the total estimated damages that could have been recovered if Plaintiffs were completely successful on all issues of liability and damages in the Action. (This percentage assumes that 100% of eligible Class Members will file timely claims; this percentage may increase depending on the number of Class Members that submit claims.) This achievement was the result of my firm s litigation and settlement negotiations. As a result of this Settlement, Class Members will receive immediate compensation for their losses in Resource Capital securities and will avoid the substantial risks of no recovery had the Action been litigated and lost at summary judgment, trial, or on appeal. C. LEVI & KORSINSKY S WORK AND EXPERTISE 68. My firm engaged in extensive factual investigation and litigation of the claims alleged. To successfully prosecute the Action, we conducted an extensive investigation and 18

76 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 19 of 25 research into the merits of the Action and undertook significant efforts to bring the Action to its current procedural position, including: Performing an in-depth review and analysis of (a) Resource Capital s SEC filings; (b) research reports by securities and financial analysts; (c) transcripts of Resource Capital s earnings conference calls and industry conferences; (d) Resource Capital s press releases; (e) news and media reports concerning Resource Capital and other facts related to this action; and (f) data reflecting the pricing of Resource Capital s securities. Conducting a thorough investigation into the law and facts of the case; Conferring extensively with experts and consultants concerning the specialized issues in the case, including in drafting the complaints, and when analyzing class certification, loss causation, and damages; Briefing and defeating Defendants motion to dismiss under Rule 12(b) and the stringent pleading standards of the PSLRA; Conducting months of discovery, including propounding and responding to multiple discovery requests, producing and reviewing documents, and issuing non-party subpoenas to entities around the country; Reviewing 119,887 pages of documents produced from Resource Capital alone and 51,139 pages of documents from half a dozen additional non-parties, including Moody s, Fitch Ratings, Blackstone, and Grant Thornton LLP; Drafting Plaintiffs mediation statement, analyzing Defendants mediation statement, and preparing for and participating in the mediation process, including a full-day mediation session held before a respected mediator; Preparing the Motion for Class Certification, Appointment of Class Representatives, and Appointment of Class Counsel; and Taking and defending expert and party depositions in connection with Plaintiffs successful bid for class certification. 19

77 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 20 of I also understand that counsel for Mr. Altman incurred hours valued at $18, at current market billing rates in reviewing and investigating his claims and the claims of other purchasers of Resource Capital preferred stock. Provided that the Court awards us the fee requested, we have agreed to pay Mr. Altman s counsel $63,333, in compensation for this work which is approximately the same lodestar multiplier as we are seeking for our own work. 70. The expertise and experience of Levi & Korsinsky is an important factor to be weighed in assessing a fair fee. As demonstrated in our firm biography, Lead Counsel has achieved significant securities class action settlements, as well as being counsel of record in cases establishing important precedents that enable litigation such as this to be successfully prosecuted. A true and accurate copy of Levi & Korsinsky s firm resume is attached hereto as Exhibit My firm prosecuted the Action vigorously, expending substantial time and resources without any assurance of obtaining any compensation for their efforts. We have already devoted a significant amount of time to this case, and fully expect to devote more time in the future administration and distribution of the Settlement. D. STANDING AND CALIBER OF OPPOSING COUNSEL 72. The quality of the work performed by Defendants Counsel in attaining the Settlement should also be evaluated in light of the quality of the opposition. 73. Defendants were represented by Covington & Burling LLP, one of the nation s leading defense firms with a renowned expertise in the field of securities class action litigation. Thus, the fact that Levi & Korsinsky achieved this Settlement for the Class in the face of such formidable legal opposition further evidences the quality of our work. E. THE RISKS OF CONTINGENT LIABILITY 74. My firm undertook representation of Plaintiffs and the Class on a wholly contingent basis. We knew from the outset that we would expend a substantial amount of time prosecuting this action, yet receive no compensation if the Action proved ultimately unsuccessful. Thus, the contingent nature of payment of fees and expenses and the risks and complexity of the Action 20

78 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 21 of 25 should be given substantial weight by the Court in considering the instant application for fees and expenses. 75. Private litigation of these cases provides an extremely important service to the public at large. The SEC is capable of only so much, thus a large need is serviced by my firm and firms like it. The requested fee provides incentive to our attorneys to continue the important work we do and help keep corporate wrongdoers accountable to their shareholders. These cases are extremely complex and expensive to litigate; rewarding the attorneys who take the risk to litigate them is paramount. F. THE REACTION OF THE CLASS TO THE REQUESTED FEE 76. As stated above, Epiq has mailed an aggregate of 52,185 copies of the Notice Packet to potential Class Members as of June 26, The Notice advised Class Members that my firm would apply for an award of attorneys fees from the Settlement Fund, not to exceed 33% of the Fund. 77. No potential Class Member has challenged the fees/expenses to be received by my firm and only one objection has been received to the Settlement as a whole. That objector has not opted out and intends to participate in the distribution of the Settlement Fund. The general lack of objection (or, for that matter, exclusion) from the Class proves that Settlement is entirely beneficial and the requested fee is well-deserved. G. THE LODESTAR CROSSCHECK CONFIRMS THE REASONABLENESS OF THE REQUESTED FEE 78. Courts may also consider a lodestar/multiplier approach in assessing the reasonableness of a fee request. The lodestar is determined by multiplying the number of reasonable hours worked on a client's case by a reasonable hourly billing rate for such services given the geographical location, the nature of the services provided, and the experience of the lawyer. It can then be increased or decreased based upon the contingent nature or risk in the 21

79 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 22 of 25 particular case involved, and the quality of the attorney's work. A percentage increase or decrease of the lodestar amount is referred to as a "multiplier". 79. Altogether, Levi & Korsinsky dedicated over 2,000 hours to prosecuting this Action. These hours were compiled from contemporaneous time records maintained by each attorney and each paralegal affiliated with Levi & Korsinsky. Applying our normal hourly rates, which are consistent with those charged by similarly skilled firms in their respective geographic areas, to the hours expended in this Action yields a lodestar amount of $1,087, The following chart lists the professionals who worked on this matter, the role of each of the professionals, the number of hour expended by each such professional, and their hourly rates: Name and Title* Hours Hourly Rate Lodestar Eduard Korsinsky (P) $885-$995 $26, Joseph Levi (P) $885-$995 $25, Nicholas I. Porritt (P) $875-$925 $190, Adam M. Apton (P) $525-$765 $404, Alexander Krot (A) $435-$575 $5, Adam McCall (A) $455 $32, Cecille Cargill (A) $495 $7, Christopher Kupka (A) 5.25 $575 $3, Justin Sherman (A) 1.50 $575 $ Julia Sun (A) 7.25 $695 $5, Lori Fulmer (A) $350 $153, Michael Ershowsky (A) $400-$455 $135, Michelle Gruesbeck (A) $455 $74, Paralegal/Paraprofessional $265-$280 $21, Total $1,087,

80 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 23 of 25 (* - P and A denotes Partner and Associate, respectively. Adam M. Apton was promoted to partner earlier this year. He was an associate during the majority of this litigation.) 81. The total number of hours expended by attorneys at my firm is 2, hours. This number is derived from the contemporaneous, daily time records regularly prepared and maintained by Lead Counsel. The total amount for the services based upon our billing rates is $1,087, In addition to the time invested in the Action by my firm, Levi & Korsinsky also expended a total of $199, in unreimbursed expenses in connection with the prosecution of this litigation. The following table, compiled from the records regularly maintained by Levi & Korsinsky, lists the expenses incurred in furtherance of this Action: Expense Amount Expert Services $162, Investigation Services $5, Photocopying/Printing Vendors $3, Notices/Publication $1, Postage/Delivery/Courier $ Mediation $4, Travel $13, Filing Fees/Court Costs/Court Reporter $7, Total $199, The expenses incurred pertaining to this Action are reflected in the books and records of my firm. These books and records are prepared from expense vouchers and check records, and are an accurate record of the expenses incurred by my firm. 84. The expert fees, which comprise the majority of the expenses generated in this litigation, were paid to two different experts. One expert provided services with respect to evaluating the mezzanine loan at issue in this lawsuit and its creditworthiness. The other expert 23

81 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 24 of 25 provided assistance calculating classwide damages and establishing evidence in support of our argument that the market for Resource Capital s securities was efficient (for the purposes of triggering the fraud on the market presumption). 85. The expenses my firm incurred in the course of litigating this matter were all reasonably necessary for and directly related to the prosecution of this case. VI. PLAINTIFFS DOUGLAS DREES AND ALLEN ALTMAN ARE DESERVING OF INCENTIVE AWARDS 86. Plaintiffs also seek modest incentive awards in exchange for their commitment in the Action. Douglas Drees was the court-appointed lead plaintiff and, as such, has been involved in the litigation of this matter for well over two years. He is an attorney by profession and very knowledgeable in terms of Resource Capital s operations and real estate investments in general. He provided valuable assistance to the prosecution of this Action and should be compensated accordingly. 87. Allen Altman served as an additional class representative for the purposes of representing Series B and Series C preferred stockholders. Without his involvement, Plaintiffs would not have been able to secure a recovery on behalf of these security holders. 88. Both Douglas Drees and Allen Altman provided document discovery and testimony at depositions. Their persistence in regards to this Action and its Settlement is noteworthy and, thus, I recommend that they each receive the incentive payments requested. VII. CONCLUSION 89. I respectfully submit that, based on an understanding of the facts and circumstances concerning the subject matter of this Action, the principles of law applicable to them, the procedural posture of this Action, and the risks of continued litigation against Defendants, the Settlement is fair, reasonable and adequate, and represents a beneficial result for the Class and should be approved by this Court. [Signature on following page] 24

82 Case 1:15-cv LLS Document 86 Filed 06/29/18 Page 25 of 25 I declare under penalty of perjury that the foregoing is true and correct. Executed this 29th day of June, Nicholas I. Porritt 25

83 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 1 of 49 EXHIBIT 1

84 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 2 of January th Anniversary Edition Recent Trends in Securities Class Action Litigation: 2017 Full-Year Review Record Pace of Filings Led by a Continued Surge in Merger Objections Highest Number of Dismissals and Lowest Settlement Values Since the Early 2000s By Stefan Boettrich and Svetlana Starykh

85 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 3 of 49 Foreword I am excited to share our 25th anniversary edition of NERA s Recent Trends in Securities Class Action Litigation with you. This marks the 25th year of work by members of NERA s Securities and Finance Practice. In this edition, we document an increase in filings, which we also noted last year, again led by a doubling of merger-objection filings. While this may be the most prominent result, this report contains discussions about other developments in filings, settlements, and case sizes as measured by NERA-defined Investor Losses. Although space limitations prevent us from sharing all of the analyses the authors have undertaken to create this latest edition of our series, we hope you will contact us if you want to learn more, to discuss our data and analyses, or to share your thoughts on securities class actions. On behalf of NERA s Securities and Finance Practice, I thank you for taking the time to review our work and hope that you will find it informative and interesting. Dr. David Tabak Managing Director

86 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 4 of 49 Recent Trends in Securities Class Action Litigation: 2017 Full-Year Review Record Pace of Filings Led by a Continued Surge in Merger Objections Highest Number of Dismissals and Lowest Settlement Values Since the Early 2000s By Stefan Boettrich and Svetlana Starykh 1 29 January 2018 Introduction and Summary 2 In 2017, an explosion in securities class action filings reflected growth not seen in almost two decades, and drove the average filing rate to more than one per day. For a second year in a row, growth was dominated by a record number of federal merger-objection filings, continuing a trend sparked by various state court decisions that restricted disclosure-only settlements. In the first quarter, more cases alleging violations of SEC Rule 10b-5 under the Securities and Exchange Act of 1934 were filed than in any quarter since the aftermath of the dotcom boom. Over the entire year, filings alleging violations of Rule 10b-5, or Section 11 or Section 12 of the Securities Act of 1933, grew for a record fifth straight year. The total size of filed securities cases, as measured by NERA-defined Investor Losses, was $334 billion and well above average for a second year, mostly due to numerous large cases alleging various regulatory violations. Allegations related to regulatory violations and misleading performance projections by management seem to be slowly supplanting claims related to accounting issues and missed earnings guidance. A record rate of case resolution was motivated by a more than 40% spike in dismissals and a 30% increase in settlements. Despite this, the value of settlements plunged to lows not seen since the early 2000s, stemming from a dearth of large or even moderate settlements. Due to an unprecedented rate of voluntary dismissals, nearly 16% of cases filed in 2017 alleging violations of Rule 10b-5, Section 11, or Section 12 were resolved by the end of the year. 1

87 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 5 of 49 Trends in Filings Number of Cases Filed There were 432 federal securities class actions filed in 2017, the third straight year of growth (see Figure 1). For the second year in a row, the filing rate was the highest seen since passage of the Private Securities Litigation Reform Act (PSLRA), with the exception of 2001 when an unusually high number of IPO laddering cases were filed. The number of filings was 44% higher in 2017 than 2016, marking the fastest rate of growth since The number of filings grew 89% over the past two years, a rate not seen since The level of 2017 filings was also well above the post- PSLRA average of approximately 244 cases per year, and 84% higher than the five-year average rate, continuing a departure from the generally stable filing rate since the aftermath of the 2008 financial crisis. Figure 1. Federal Securities Class Action Filings January 1996 December IPO Laddering Filings Filings, Excluding IPO Laddering Number of Federal Filings Five-Year Average: Filing Year

88 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 6 of 49 As of November 2017, there were 5,241 companies listed on the major US securities exchanges, including the NYSE and Nasdaq (see Figure 2). The 432 federal securities class action suits filed in 2017 involved approximately 8.2% of publicly traded companies, nearly double the rate of 2014, when fewer than 4.2% of companies were subject to a securities class action. Contrasting with the uptick in listed firm counts over the past five years, the longer-term trend is toward fewer publicly listed companies. Since passage of the PSLRA in 1995, the number of publicly listed companies in the United States has steadily declined by about 3,500, or by more than 40%. Recent research attributed this decline to fewer new listings and an increase in delistings, mostly through mergers and acquisitions. 3 Figure 2. Federal Filings and Number of Companies Listed on US Exchanges January 1996 December Federal Filings 10, ,783 8,884 8,448 8,200 7,994 Listed Companies 9,000 8,000 Number of Federal Filings ,288 6,757 5,241 6,154 6,029 5,941 5,204 6,097 6,005 5,401 5,179 4,988 5,248 5,095 4,916 5,008 5, ,000 6,000 5,000 4,000 3,000 2,000 Number of Listed Companies , Note: Listed companies include those listed on the NYSE and Nasdaq. Listings data from 2016 and 2017 were obtained from World Federation of Exchanges (WFE). The 2017 listings data is as of November Data for prior years was obtained from Meridian Securities Markets and WFE Filing Year

89 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 7 of 49 Despite the drop in the number of listed companies, the average number of securities class action filings over the preceding five years, of about 235 per year, is still higher than the average filing rate of about 216 over the first five years after the PSLRA went into effect. The long-term trend toward fewer listed companies, coupled with an increased rate of class actions, implies that the average probability of a listed firm being subject to such litigation has increased from 3.2% for the period to 8.2% in Over the past two years, the higher average risk of federal securities class action litigation has been driven by dramatic growth in merger-objection cases, which were previously filed much more often in various state courts, but are now less so, given recent rulings discouraging filings in those jurisdictions. Hence the increase in the average firm s litigation risk might be lower than is indicated above, especially given that the risk of merger-objection litigation is limited to those planning or engaged in M&A activity. The average probability of a firm being targeted by what is often regarded as a standard securities class action one that alleges violations of Rule 10b-5, Section 11, and/or Section 12 was only 4.1% in 2017; higher than the average probability of 3.0% between 2000 and Filings by Type In 2017, each of the major filing types currently tracked in NERA s securities class action database experienced growth (see Figure 3). The continued near-record overall growth rate was driven by a more than doubling of merger-objection filings for the second consecutive year. Federal mergerobjection filings typically allege a violation of Section 14(a), 14(d), and/or 14(e) of the Securities and Exchange Act of 1934, and/or a breach of fiduciary duty by managers of the firm being acquired. Filings of standard securities cases were up by 11% over 2016, the fifth consecutive year of steady growth and the longest expansion on record. While standard filings still predominate in federal dockets, the 197 merger-objection cases constituted about 46% of all filings and were almost at parity with the 216 standard filings. The continued growth in merger objections likely stemmed from the filing of federal merger-objection suits that would have been filed in other jurisdictions but for various state-level decisions limiting disclosure-only settlements, with the most prominent of these being the 22 January 2016 Trulia decision in the Delaware Court of Chancery. 4 Although aggregate merger-objection filings (including those at the state level) may correspond with the rate of merger and acquisitions, such deal activity does not appear to have historically been the primary driver of federal merger-objection filings over multiple years. The number of federal merger-objection filings generally fell between 2010 and 2015, despite increased M&A activity. The higher filing counts in 2016 and 2017 likely stemmed from trends in the choice of jurisdiction rather than trends in deal volume. 5 On a quarterly basis, the filing of 90 standard cases in the first quarter of 2017 was two-thirds higher than in the fourth quarter of 2016 and the highest quarterly rate since Cases filed during the first quarter resembled filings over the remainder of the year. Coupled with slower filing rates in each of the latter three quarters, this may portend a slowdown in standard filings in early Besides filings of standard cases and merger-objection cases, a variety of other filings rounded out Several filings alleged breaches of fiduciary duty (including cases regarding the safety of alternative investments and shareholder class rights), but we also saw filings related to alleged fraud in the sale of privately held securities in Uber, Inc. 4

90 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 8 of 49 Figure 3. Federal Filings by Type January 2008 December Merger-Objection Filings Other Filings Rule 10b-5 Filings Rule 10b-5 and Section 11 or 12 Filings Section 11 or 12 Filings 432 Number of Federal Filings Filing Year Merger-Objection Filings In 2017, federal merger-objection filings more than doubled for the second consecutive year (see Figure 4). While not matching the dramatic growth in filings in 2010, which did coincide with a doubling in M&A activity, the persistent increase in filings over the past two years overlapped with only marginal growth in M&A deal activity: a slowdown in 2016 was followed by a recovery in Rather, the jurisdiction where cases were brought and the attributes of target firms imply that this trend, in part, reflects forum selection by plaintiffs. Historically, state courts, rather than federal courts, have served as the primary forum for mergerobjection cases. 7 Between 2010 and 2015, the slowdown in federal merger-objection filings largely mirrored the slowdown in multi-jurisdiction litigation, such as merger objections filed in multiple state courts. This trend, according to researchers, may be due to the increased use and effectiveness of forum selection corporate bylaws that limit the ability of plaintiffs to file claims outside of stipulated jurisdictions

91 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 9 of 49 The increased adoption of forum selection bylaws coincided with various state court decisions in 2015 and 2016, particularly those against disclosure-only settlements, including the Trulia decision handed down by the Delaware Court of Chancery on 22 January Prior to the Trulia decision, the Delaware Court of Chancery attracted about half of eligible merger-objection cases. Research suggested that the Trulia decision would drive merger objections to alternative jurisdictions, such as federal courts. 10 This prediction has largely been borne out thus far. In 2016, more than 90% of the growth in federal merger-objection cases was associated with firms incorporated in Delaware. In 2017, firms incorporated in Delaware accounted for more than half of the annual growth in filings. The 2017 increase in federal filings targeting firms incorporated in Delaware was concentrated in the Third Circuit (of which Delaware is part), where 28% of merger objections were filed, and the Ninth Circuit, where 22% of such cases were filed. Whether the movement of merger-objection suits out of Delaware persists will likely depend on the extent to which other jurisdictions adopt the Delaware Court of Chancery s lead on disclosure-only settlement disapproval, as well as on the rate of corporate adoption of forum selection bylaws. 11 In the latter part of 2016, the Seventh Circuit ruled against a disclosure-only settlement in In re: Walgreen Co. Stockholder Litigation. 12 Unsurprisingly, the proportion of merger objections filed in the Seventh Circuit fell by more than 60% in 2017 versus In 2017, merger-objection cases filed in the Seventh Circuit were dismissed at nearly double the rate of other circuits. In 2017, 71 federal merger-objection filings targeted firms not incorporated in Delaware, up from 27 in A quarter of the growth involved firms incorporated in Maryland and Minnesota, cases that made up nearly half of all merger objections targeting non-delaware firms filed in the Fourth and Eighth Circuits. After Delaware, firms incorporated in Maryland were most frequently targeted in federal merger objections in both 2016 and This followed a 2013 decision in Maryland State Circuit Court rejecting a request for attorneys fees in a disclosure-only settlement. 13 Figure 4. Federal Merger-Objection Filings and Merger-Objection Cases with Multi-State Claims January 2009 December Target Firms Incorporated in Delaware Target Firms Not Incorporated in Delaware Number of Federal Filings Indeterminate Domicile of Incorporation Merger-Objection Cases with Multi-State Claims Trulia Decision Filing Year Notes: Counts of merger-objection cases with multi-state claims based on data obtained from Matthew Cain and Steven Solomon, "Takeover Litigation in 2015," Berkeley Center for Law, Business and the Economy, 14 January Data on multi-state claims unavailable for 2016 or State of incorporation obtained from the Securities and Exchange Commission. 1 In re Trulia, Inc. Stockholder Litigation, C.A. No CB (Del. Ch. Jan. 22, 2016). 6

92 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 10 of 49 Filings Targeting Foreign Companies Foreign companies continued to be disproportionately targeted in standard securities class actions in Despite making up a relatively stable share of listings, foreign companies share of filings increased for a fourth consecutive year and such filings made up more than a quarter of all standard filings (see Figure 5). In 2017, there were 55 standard filings against foreign companies, a 25% increase over 2016 and more than a 50% increase over Recent growth in filings has been driven by alleged regulatory violations. The number of such cases increased by more than 80% in 2017, which followed more than a 50% increase in In 2017, more than a third of filings against foreign companies alleged regulatory violations. Filings against foreign companies spanned several economic sectors, with more than 20% targeting firms in the Health Technology and Services Sector (down from more than 25% in 2016). Half of filings against companies in this sector alleged regulatory violations. Over the last five years, the percentage of filings against foreign companies in the Electronic Technology and Technology Services Sector has persistently fallen, from more than 30% of all filings in 2013 to about 8% in In 2011, a record 31% of filings targeted foreign companies, mostly due to a surge in litigation against Chinese companies, which was mainly related to a proliferation in so-called reverse mergers years earlier. A reverse merger is one whereby a company orchestrates a merger with a publicly traded company listed in the US, thereby enabling access to US capital markets without going through the process of obtaining a new listing. Merger-objection claims infrequently target foreign companies. 15 In 2017, there were four mergerobjection claims against foreign companies (up from two in 2016). These represent 2% of all merger objections, and about 7% of all filings against foreign companies. 7

93 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 11 of 49 Figure 5. Foreign Companies: Share of Filings and Share of Companies Listed on US Exchanges Shareholder Class Actions with Alleged Violations of Rule 10b-5, Section 11, or Section 12 January 2008 December % % of US Filings Against Foreign Companies 31.1% % of US Listings Represented by Foreign Companies 30% Percentage of Filings / Percentage of Listings 25% 20% 15% 10% 15.7% 13.8% 15.0% 8.7% 17.1% 15.9% 22.6% 20.7% 19.7% 19.3% 17.3% 16.4% 16.6% 16.5% 16.7% 17.1% 16.8% 25.5% 17.1% 5% 0% Filing Year Note: Foreign company status based on country of principal executive offices. 8

94 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 12 of 49 Geographically, growth in standard filings against foreign companies in 2017 was driven by claims against European and Chinese firms (see Figure 6). The number of filings against European firms grew for the second consecutive year, while claims against Chinese firms were resurgent. Over the past five years, filings targeting European firms have overtaken those against Chinese firms. This may be due to a recent tendency for Chinese companies to delist from US exchanges and relist their shares in Chinese markets, which historically have had higher relative valuations. 16 In addition to reducing the overall count of listed Chinese companies in the United States, such a relisting mechanism is more likely to be taken advantage of by firms with relatively weak accounting or disclosure practices. Figure 6. Filings Against Foreign Companies Shareholder Class Actions with Alleged Violations of Rule 10b-5, Section 11, or Section 12 by Region January 2013 December 2017 Number of Federal Filings 70 China/Hong Kong Other 60 Europe Canada Asia (Ex-China/Hong Kong) Filing Year Note: Foreign company status based on country of principal executive offices. 9

95 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 13 of 49 Section 11 Filings There were 25 federal filings alleging violations of Section 11 in 2017 (see Figure 7). This is approximately the average rate since 2014, a year described by the Financial Times as a bumper IPO year that precipitated an uptick in Section 11 filings. 17 IPO activity has since declined, falling by more than 40% between 2014 and In 2017, Section 11 filings, which spanned multiple economic sectors, were concentrated in the Second and Third Circuits. Filings in the Ninth Circuit were proportionally underrepresented in 2017, accounting for about 60% of the average proportion since While potentially just an anomaly, the slowdown in Section 11 litigation in the Ninth Circuit may stem from plaintiffs filing Section 11 claims in California state courts, perceived as being relatively plaintiff-friendly, in lieu of federal courts. 19 Two factors may reverse this trend in coming years. First, several firms have recently required that Section 11 claims be filed in federal courts. 20 Second, on 27 June 2017, the US Supreme Court granted certiorari in Cyan, Inc. v. Beaver County Employees Retirement Fund, to decide whether state courts have jurisdiction over class actions with claims under the Securities Act of 1933, including Section 11 claims. 21 Figure 7. Federal Section 11 Filings January 2008 December Number of Federal Filings Filing Year 10

96 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 14 of 49 Aggregate NERA-Defined Investor Losses In addition to the number of cases filed, we also consider the total potential size of these cases using a metric we label NERA-defined Investor Losses. NERA s Investor Losses variable is a proxy for the aggregate amount that investors lost from buying the defendant s stock, rather than investing in the broader market during the alleged class period. Note that the Investor Losses variable is not a measure of damages because any stock that underperforms the S&P 500 would have Investor Losses over the period of underperformance; rather, it is a rough proxy for the relative size of investors potential claims. Historically, Investor Losses have been a powerful predictor of settlement size. Investor Losses can explain more than half of the variance in the settlement values in our database. We do not compute NERA-defined Investor Losses for all cases included in this publication. For instance, class actions in which only bonds and not common stock are alleged to have been damaged are not included. The largest excluded groups are IPO laddering cases and merger-objection cases. In 2017, aggregate NERA-defined Investor Losses (a measure of case size) was $334 billion; 50% more than the five-year average of $222 billion (see Figure 8). The increase in total case size since 2015 was due to a tripling of filings with Investor Losses between $1 billion and $5 billion, and a jump in filings with very large Investor Losses (over $10 billion). Although down from the 2016 record, 2017 marked the second year in a row since 2008 in which NERA-defined Investor Losses exceeded $300 billion. Like in 2016, the high level of Investor Losses in 2017 stemmed from the number and size of filings claiming regulatory violations (i.e., those alleging a failure to disclose a regulatory issue), which totaled $163 billion. Five of the eight cases in the largest strata of Investor Losses alleged regulatory violations. A considerable share of NERA-defined Investor Losses in 2016 were tied to two major industrial antitrust investigations. The fact that these were one-off events suggested that aggregate case size would fall back considerably in Although total Investor Losses did decline in 2017, the metric was still more than double that of 2015 due to more filings (especially of cases with $1 to $5 billion in Investor Losses), and, in particular, more regulatory filings. This indicates that filings alleging regulatory violations, which tend to have higher Investor Losses, are becoming more broadly based and potentially a stronger driver of Investor Losses going forward. Details of filings alleging regulatory violations are discussed in the Allegations section below. Excluding regulatory claims, aggregate NERA-defined Investor Losses were $171 million, down from $262 million in Notable cases with very large Investor Losses that did not allege regulatory violations included a data breach case against Yahoo! Inc. and a case against Facebook, Inc. related to disclosure of customer video screening times. 11

97 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 15 of 49 Figure 8. Aggregate NERA-Defined Investor Losses ($Billion) Shareholder Class Actions with Alleged Violations of Rule 10b-5, Section 11, or Section 12 January 2008 December 2017 $500 $450 $400 Investor Losses $10 or Greater $5 $9.9 $1 $4.9 Less than $1 $403 $424 Aggregate Investor Losses ($Billion) $350 $300 $250 $200 $150 $239 $67 $203 $100 $197 $129 $249 $166 $217 $124 $160 $162 $145 $39 $19 $46 $230 $72 $334 $144 $46 $100 $50 $0 $27 $46 $71 $7 $42 $56 $114 $92 $31 $14 $67 $67 $54 $41 $39 $33 $33 $27 $20 $15 $20 $19 $26 $26 $26 $30 $ Filing Year Filings by Circuit In 2017, filings increased in every federal circuit except the Seventh Circuit, primarily due to the jump in federal merger-objection cases (see Figure 9). Although the Second and Ninth Circuits continued to have the most filings, rapid growth in merger objections accounted for the vast majority of filings in the First, Third, and Fourth Circuits, with filings more than doubling in the Third and Fourth Circuits. Excluding merger objections, filings in the Second Circuit grew by a third to 84, contrasting with the Ninth Circuit, in which non-merger-objection filings fell by 12% to 51. As in the past, non-mergerobjection filings in the Ninth Circuit were dominated by claims against firms in the Electronic Technology and Technology Services Sector. There was also a 60% jump in non-merger-objection cases in the Third Circuit. As in the past, the Third Circuit was subject to a disproportionate number of claims in the Health Technology and Services Sector (despite a general slowdown in such filings). This was mostly driven by the fact that the Third Circuit has a higher proportion of firms in the Pharmaceutical Preparations industry (SIC code 2834), an industry that dominates filings in Health Technology and Services Sector

98 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 16 of 49 The number of merger-objection filings quadrupled in the Third Circuit, which includes Delaware. However, acceleration in the number of such filings was greatest in the Eighth Circuit, where the sharpest increase was seen among firms incorporated in Minnesota. The Seventh Circuit is the only circuit where merger-objection filings fell, which follows its 2016 ruling against disclosure-only settlements. 24 Despite remarkable growth in merger objections in certain circuits, it may be too early to identify the circuits that would be most likely to accommodate such filings. Rather, growth in merger-objection filings at the circuit level is likely more reflective of opposition to such filings at the state level. Figure 9. Federal Filings by Circuit and Year January 2013 December Number of Federal Filings DC 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th Circuit 13

99 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 17 of 49 Filings by Sector In 2017, filing counts were highest in the three historically dominant sectors, which include firms involved in health care, technology, and financial services (see Figure 10). However, the share of filings in these sectors fell from 63% in 2016 to 53% in Claims against firms in the Health Technology and Services Sector were again dominated by filings against firms in the Pharmaceutical Preparations industry (SIC code 2834), which constituted about 63% of filings in the sector. A rise in the number of filings against firms in the Commercial and Industrial Services Sector coincided with an increase in filings alleging regulatory violations and misleading future performance, both of which targeted firms in that sector. Of industries with more than 25 publicly traded companies, the industry with the highest percentage of US companies targeted by litigation was the Motor Vehicles and Equipment industry (SIC 371), where 10% of firms were targeted. Nine percent of firms in the Telephone Communications industry (SIC 481) faced litigation, while more than 8% of firms in the Drugs industry (SIC 283) were targeted. Due to alleged manipulative financing schemes by Kalani Investments Limited affecting multiple Greek shipping companies, filings targeted 8% of firms in the Deep Sea Foreign Transport of Freight industry (SIC 441). Figure 10. Percentage of Federal Filings by Sector and Year Excluding Merger-Objection Cases January 2013 December 2017 Health Technology and Services Electronic Technology and Technology Services 14% 14% 14% 21% 25% 22% 26% 22% 21% 34% Commercial and Industrial Services Retail Trade 8% 8% 9% 4% 7% 7% 3% 5% 3% 5% Finance 11% 13% 15% 13% 21% Transportation and Utilities 2% 2% 4% 3% 4% Consumer Durables and Non-Durables 5% 3% 6% 9% 10% Communications 2% 1% 2% 0% 3% Energy and Non- Energy Minerals 10% 4% 4% 8% 7% Producer and Other Manufacturing 4% 6% 5% 3% 3% Consumer and Distribution Services 7% 9% 5% 5% 7% Process Industries 2% 2% 3% 1% 3% Note: This analysis is based on the FactSet Research Systems Inc. economic sector classification. Some of the FactSet economic sectors are combined for presentation. 14

100 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 18 of 49 Allegations In 2017, the number of cases alleging regulatory violations increased for the second consecutive year (see Figure 11). The filing of 56 regulatory cases was 43% higher than 2016, and accounted for about 26% of standard filings in Such cases accounted for a total of $163.2 billion in NERAdefined Investor Losses, or nearly half of the 2017 total, compared with $161.7 billion in Investor Losses in 2016, or about 38% of the 2016 total. In 2017, we witnessed the filing of large cases alleging regulatory violations that spanned multiple industries. In 2016, two widespread investigations into two industries accounted for nearly 80% of NERA-defined Investor Losses tied to regulatory violations (about $127 billion). 25 However, in 2017, not only did cases alleging regulatory violations account for more Investor Losses, but those Investor Losses were distributed across more cases and industries. Median NERA-defined Investor Losses for regulatory cases were also higher, increasing from $250 million over the period to $1.05 billion over the period. The largest regulatory cases involved several industries and included allegations related to safety recalls, emissions defeat devices, customer account creation, and antitrust violations. The number of filings alleging misleading future performance rose for the second consecutive year. Such allegations are more frequent in the Health Technology and Services Sector, and particularly in the Pharmaceutical Preparations industry (SIC code 2834), which sees many cases related to drug development. Most complaints include a wide variety of allegations, not all of which are depicted here. Due to multiple types of allegations in complaints, the same case may be included in multiple categories. Figure 11. Types of Misrepresentations Alleged Shareholder Class Actions with Alleged Violations of Rule 10b-5, Section 11, or Section 12 January 2013 December % % 39% % 2016 Percentage of Federal Filings 30% 25% 20% 15% 30% 31% 30% 29% 25% 24% 21% 18% 16% 26% 23% 23% 22% 20% 20% 19% 18% 18% % 5% 0% Accounting Issues Missed Earnings Guidance Misled Future Performance 7% 6% 6% 3% 2% 3% 2% 2% 1% 1% Regulatory Issues Related to Merger-Integration the Environment Issues 15

101 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 19 of 49 Alleged Insider Sales The percentage of Rule 10b-5 class actions that alleged insider sales continued to decrease in 2017, dropping to 3% and marking a fourth consecutive record low (see Figure 12). Cases alleging insider sales were more common in the aftermath of the financial crisis, when a quarter of filings included insider trading claims. In 2005, half of Rule 10b-5 class actions filed included such claims. Figure 12. Percentage of Rule 10b-5 Filings Alleging Insider Sales by Filing Year January 2008 December % 30% 29% 25% 26% 24% Percentage of 10b-5 Filings 20% 15% 21% 17% 19% 14% 10% 11% 5% 4% 3% 0% Filing Year 16

102 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 20 of 49 Time to File The term time to file denotes the time that has elapsed between the end of the alleged class period and the filing date of the first complaint. Figure 13 illustrates how the median time and average time to file (in days) have changed over the past five years. The median time to file fell to a record low of 10 days in 2017, indicating that it took 10 days or less to file a complaint in 50% of cases. This shows a lower frequency of cases with long periods of time between when an alleged fraud was revealed and the filing of a related claim. While the median time to file continued to drop, the average time was affected by 10 cases with very long filing delays. One case against Rio Tinto, regarding the valuation of mining assets in Mozambique, took more than 4.5 years to file and boosted the average time to file by nearly 9%. 26 Despite the small minority of cases with very long times to file, the data generally point toward a lower incidence of cases with long periods between the date of discovery of an alleged fraud and the date when a related claim is filed. Figure 13. Time to File Rule 10b-5 Cases from End of Alleged Class Period to File Date January 2013 December % % % Number of Days Percentage of Cases Filed 90% 80% 84% 90% 88% Median Time to File Average Time to File Percentage of Cases Filed Within 1 Year 70% Note: Excludes cases where the alleged class period could not be unambiguously determined. 17

103 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 21 of 49 Analysis of Motions NERA s statistical analysis has found robust relationships between settlement amounts and the stage of the litigation at which settlements occur. We track filings and decisions on three types of motions: motion to dismiss, motion for class certification, and motion for summary judgment. For this analysis, we include securities class actions in which purchasers of common stock are part of the class and in which a violation of Rule 10b-5, Section 11, or Section 12 is alleged. As shown in the below figures, we record the status of any motion as of the resolution of the case. For example, a motion to dismiss which had been granted but was later denied on appeal is recorded as denied, even if the case settles without the motion being filed again. Motions for summary judgment were filed by defendants in 7.5%, and by plaintiffs in only 2.2%, of the securities class actions filed and resolved over the period, among those we tracked. 27 Outcomes of motions to dismiss and motions for class certification are discussed below. 18

104 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 22 of 49 Motion to Dismiss A motion to dismiss was filed in 94% of the securities class actions tracked. However, the court reached a decision on only 77% of the motions filed. In the remaining 23% of cases in which a motion to dismiss was filed, either the case resolved before a decision was reached, plaintiffs voluntarily dismissed the action, or the motion to dismiss itself was withdrawn by defendants (see Figure 14). Out of the motions to dismiss for which a court decision was reached, the following three outcomes capture all of the decisions: granted with or without prejudice (45%), granted in part and denied in part (30%), and denied (25%). Figure 14. Filing and Resolutions of Motions to Dismiss Shareholder Class Actions with Alleged Violations of Rule 10b-5, Section 11, or Section 12 Excluding IPO Laddering Cases Cases Filed and Resolved January 2000 December 2017 Out of All Cases Filed and Resolved Out of Cases with MTD Filed Out of Cases with MTD Decided Not Filed: 6% Plaintiffs Voluntarily Dismissed Action: 8% MTD Withdrawn by Defendants: 3% No Court Decision Prior to Case Resolution: 12% Granted Without Prejudice: 7% Filed: 94% Court Decision Prior to Case Resolution: 77% Granted: 38% Partially Granted/ Partially Denied: 30% Denied: 25% Note: Includes cases in which holders of common stock are part of the class. 19

105 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 23 of 49 Motion for Class Certification Most cases were settled or dismissed before a motion for class certification was filed: 72% of cases fell into this category. Of the remaining 28%, the court reached a decision in only 55% of the cases in which a motion for class certification was filed. Overall, only 15% of the securities class actions filed (or 55% of the 28%) reached a decision on the motion for class certification (see Figure 15). According to our data, 89% of the motions for class certification that were decided were granted in full or partially. Figure 15. Filing and Resolutions of Motions for Class Certification Shareholder Class Actions with Alleged Violations of Rule 10b-5, Section 11, or Section 12 Excluding IPO Laddering Cases Cases Filed and Resolved January 2000 December 2017 Out of All Cases Filed and Resolved Out of Cases with MCC Filed Out of Cases with MCC Decision Not Filed: 72% MCC Withdrawn by Plaintiffs: 1% Filed: 28% No Court Decision Prior to Case Resolution: 44% Court Decision Prior to Case Resolution: 55% Granted: 80% Partially Granted/ Partially Denied: 9% Denied: 6% Denied Without Prejudice: 5% Note: Includes cases in which holders of common stock are part of the class. 20

106 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 24 of 49 Approximately 65% of the decisions handed down on motions for class certification were reached within three years from the original filing date of the complaint (see Figure 16). The median time was about 2.5 years. Figure 16. Time from First Complaint Filing to Class Certification Decision Shareholder Class Actions with Alleged Violations of Rule 10b-5, Section 11, or Section 12 Excluding IPO Laddering Cases Cases Filed and Resolved January 2000 December Years,15, 6% More than 5 Years, 27, 11% Less than 1 Year, 11, 4% 1 2 Years, 66, 26% 3 4 Years, 47, 19% 2 3 Years, 87, 34% Note: Includes cases in which holders of common stock are part of the class. 21

107 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 25 of 49 Trends in Case Resolutions Number of Cases Settled or Dismissed In 2017, 353 securities class actions were resolved, which is a post-pslra record high (see Figure 17). Of those, 148 cases settled, approaching the record 150 in The number of settlements was up by more than 30% over 2016, when 113 cases settled. A record 205 cases were dismissed in 2017, which marked the second consecutive year (and second year since the PSLRA became law) in which more cases were dismissed than settled. More than 40% of cases dismissed in 2017 were done so within a year of filing, the fastest pace since the passage of the PSLRA. As with filings of securities class actions, case resolution statistics were affected by the surge in federal merger-objection cases. Merger objections made up 30% of all active cases during 2017, but constituted 43% of dismissals and 46% of settlements. 28 Moreover, of merger-objection cases dismissed in 2017, 89% were done so within one year of filing, compared with 29% for non-merger-objections cases. 29 Beside merger-objection cases, most securities class actions in NERA s database allege violations of Rule 10b-5, Section 11, and/or Section 12, and are often regarded as standard securities class actions. 30 There were 116 dismissals of such cases in 2017, a record high. Contrasting with the record high number of dismissals, only 80 cases settled, near the 2012 record post-pslra low. In 2017, settlements of non-merger-objection cases constituted less than 41% of all case resolutions, a post-pslra low. Figure 17. Number of Resolved Cases: Dismissed or Settled January 2008 December Merger Objection Settled 350 Settled Merger Objection Dismissed 353 Dismissed Number of Federal Cases Resolution Year 22

108 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 26 of 49 Case Status by Year Figure 18 shows the current resolution status of cases by filing year. Each percentage in the figure represents the current resolution status of cases filed in each year as a proportion of all cases filed in that year. IPO laddering cases are excluded, as are merger-objection cases, and verdicts. Historically, more cases settled than were dismissed. However, the rate of case dismissal has steadily increased. While only about a third of cases filed between 2000 and 2002 were dismissed, in 2011, the most recent year with substantial resolution data, about half of cases filed were dismissed. 31 While dismissal rates have been climbing since 2000, at least until 2011, the ultimate dismissal rate for cases filed in more recent years is less certain. On one hand, it may increase further, as there are more pending cases awaiting resolution. On the other hand, it may decrease because recent dismissals have more potential than older ones to be appealed or re-filed, and cases that were recently dismissed without prejudice may ultimately result in settlements. Figure 18. Status of Cases as Percentage of Federal Filings by Filing Year Excluding Merger Objections and IPO Laddering Cases and Verdicts January 2000 December 2017 Settled Pending Dismissed 13% 6% 64% 68% 62% 57% 55% 53% 56% 51% 48% 37% 42% 47% 41% 32% 35% 41% 2% 3% 3% 10% 8% 20% 24% 29% 70% 85% 36% 32% 36% 42% 44% 46% 42% 46% 48% 53% 50% 52% 39% 43% 35% 46% 24% 15% Note: Dismissals may include dismissals without prejudice and dismissals under appeal. Filing Year 23

109 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 27 of 49 Number of Cases Pending The number of securities class actions pending in the federal system has steadily increased from a post-pslra low of 555 in 2011 (see Figure 19). 32 Since then, pending case counts have increased every year (indeed at a faster rate in every year except 2015). In 2017, the number pending cases in the federal system increased to 785, up by 12% from 2016 and 41% from Generally, since cases are either pending or resolved, a change in filing rate or a lengthening of the time to case resolution potentially contributes to changes in the number of cases pending. If the number of new filings is constant, the change in the number of pending cases can be indicative of whether the time to case resolution is generally shortening or lengthening. The increase in pending cases in 2017 partially stemmed from a record number of recent filings, which was only partially offset by the record number of case resolutions. Approximately 20% of the growth in pending cases in 2017 is tied to new filings. In other words, despite the record number of cases filed in the past year also being resolved at a record rate, new filings are adversely affecting the pending case load. The recent influx of merger-objection filings corresponded with considerable differences in the growth of pending cases between circuits. Growth in pending cases between 2015 (just before the Trulia decision) and 2017 was about 5.5 times higher in the four circuits with the most new merger-objection filings relative to historical filing rates, versus the four circuits with the fewest new merger-objection filings relative to historical filing rates. Overall, in 2016 and 2017, mergerobjection filings in the Third, Fourth, Eighth, and Tenth Circuits exceeded the total number of all types of filings in those circuits in 2014 and 2015 by about 6.5%. This corresponded with a 41.9% increase in pending cases in those circuits. That contrasts with the Second, Fifth, Seventh, and Eleventh Circuits, where new merger objections in 2016 and 2017 were about 82.7% less than aggregate filings in 2014 and This corresponded with only about a 7.5% increase in pending cases in those circuits. 33 It remains to be seen whether the recent influx of merger-objection cases significantly slows processing of standard securities class actions. 24

110 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 28 of 49 Figure 19. Number of Pending Federal Cases Excluding IPO Laddering Cases January 2008 December Years Since Filing 5 12 Years 4 5 Years 3 4 Years 2 3 Years 1 2 Years <1 Year 785 Number of Pending Federal Cases Year Note: Years since filing are year-end calculations. The figure excludes, in each year, cases that had been filed more than 12 years earlier, which ensures that all pending cases were filed post-pslra and that years are comparable. 25

111 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 29 of 49 Time to Resolution The term time to resolution denotes the time between the filing of the first complaint and resolution (whether through settlement or dismissal). Figure 20 illustrates the time to resolution for all securities class actions filed between 2001 and 2013, and shows that about 38% of cases are resolved within two years of initial filing and about 60% are resolved within three years. 34 The median time to resolution for cases filed in 2015 (the last year with sufficient resolution data) was 2.3 years, similar to the range observed over the preceding five years. Over the previous decade, the median time to resolution declined by more than 5%, primarily due to an increase in the dismissal rate (dismissals are generally resolved faster than settlements) and due to shorter time to settlement, as opposed to a shorter time to dismissal. Figure 20. Time from First Complaint Filing to Resolution Excludes Merger Objection and IPO Laddering Cases Cases Filed January 2001 December 2013 More than 4 Years 25% Less than 1 Year 13% 3 4 Years 15% 1 2 Years 25% 2 3 Years 22% 26

112 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 30 of 49 Trends in Settlements We present several settlement metrics to highlight attributes of cases that settled in 2017 and to compare them with cases settled in past years. We discuss two ways of measuring average settlement amounts and calculate the median settlement amount. Each calculation excludes IPO laddering cases, merger-objection cases, and cases that settle with no cash payment to the class, as settlements of such cases may obscure trends in what have historically been more typical cases. Each of our three metrics indicates a decline in settlement values on an inflation-adjusted basis to lows not observed since the early 2000s. The recent drop is in sharp contrast with a steady increase in overall settlement values over the preceding two years. However, excluding settlements of over $1 billion, 2017 saw the second consecutive annual drop in the average settlement value. For the first time since 1998, no case settled for more than $250 million (without adjusting for inflation). Record-low settlement metrics in 2017 do not necessarily indicate that cases were, on average, especially weak, as the aggregate size of settled cases in 2017 (indicated by aggregate NERAdefined Investor Losses) was the lowest since The trends in 2017 settlements do not necessarily portend low aggregate settlements in the future. 35 In fact, aggregate Investor Losses of pending cases, a factor that has historically been significantly correlated with settlement amounts, increased for the second consecutive year and currently exceed $900 billion. 36 Average Investor Losses of pending standard cases have also increased for the second consecutive year to $2.1 billion, but have fallen from a 10-year high of $3.8 billion in To illustrate how many cases settled over various ranges in 2017 compared with prior years, we provide a distribution of settlements over the past five years. We also tabulated the 10 largest settlements of

113 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 31 of 49 Average and Median Settlement Amounts In 2017, the average settlement amount fell to less than $25 million, a drop of about two-thirds compared with 2016, adjusted for inflation (see Figure 21). This contrasts with increases in yearover-year average settlements between 2014 and While infrequent large settlements are generally responsible for the wide variability in average settlement amounts over the past decade, in 2017 there was a dearth of even moderate settlements. Figure 21. Average Settlement Value ($Million) Excluding Merger-Objection Cases, IPO Laddering Cases, and Settlements for $0 Payment to the Class January 2008 December 2017 Nominal $ $140 Inflation Adjustment $120 $121 + $ Adjusted for Inflation $100 $89 ($Million) $80 $74 $60 $47 $48 $108 $55 $54 $40 $34 $85 $36 $72 $20 $41 $42 $31 $52 $35 $52 $25 $25 $ Settlement Year 28

114 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 32 of 49 Figure 22 illustrates that, even excluding settlements over $1 billion, the $25 million average settlement in 2017 is more than 40% less than the comparable figure from 2016, and more than 25% less than the next lowest average settlement over the last decade (in 2011). Adjusted for inflation, the average settlement in 2017 was the lowest since Figure 22. Average Settlement Value ($Million) Excluding Settlements over $1 Billion, Merger-Objection Cases, IPO Laddering Cases, and Settlements for $0 Payment to the Class January 2008 December 2017 Nominal $ $60 + Inflation Adjustment $ Adjusted for Inflation $57 $54 $50 $48 $45 $44 $40 $39 $36 $36 $34 ($Million) $30 $54 $52 $25 $20 $32 $42 $40 $31 $36 $35 $43 $10 $25 $ Settlement Year 29

115 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 33 of 49 Despite the dramatic drop in 2017 average settlement metrics, over the longer term, settlement amounts have not declined as considerably across the board. The 2017 median settlement amount, or the amount that is larger than half of the settlement values over the year, is only moderately below the median settlement values in 2014 and 2015, even after adjusting for inflation (see Figure 23). Despite this, the median settlement in 2017 is the lowest since Figure 23. Median Settlement Value ($Million) Excluding Settlements over $1 Billion, Merger-Objection Cases, IPO Laddering Cases, and Settlements for $0 Payment to the Class January 2008 December 2017 $14 $13 Nominal $ $12 Inflation Adjustment $12 + $ Adjusted for Inflation $10 $9 $10 $10 $9 ($Million) $8 $6 $8 $12 $7 $7 $6 $11 $4 $8 $9 $7 $10 $7 $7 $9 $6 $2 $ Settlement Year 30

116 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 34 of 49 Securities class actions targeting foreign issuers settled for an average of $22.9 million in 2017, close to parity with settlements of cases against domestic issuers (see Figure 24). Contrasting with the slowdown in high and moderate settlements against domestic issuers, there were two relatively large settlements against foreign issuers in BP p.l.c. (2010) settled for $175 million, while Elan Corporation plc (2012) settled for $135 million, with both settlements among the top 10 settlements in Excluding these two cases, the 2017 average was $8.2 million. Figure 24. Average Settlement Value US vs. Foreign Companies ($Million) Excluding Settlements over $1 Billion, Merger-Objection Cases, and Settlements for $0 Payment to the Class January 2013 December 2017 $70 $60 $63.5 $65.8 US Foreign $50 $44.4 $50.5 ($Million) $40 $30 $25.5 $22.9 $20 $10 $9.8 $8.5 $12.8 $15.2 $ Note: Foreign company status based on country of principal executive offices. Settlement Year 31

117 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 35 of 49 In 2017, the median settlement of securities class actions targeting foreign issuers was $3.4 million, in line with prior years. Securities class actions against foreign issuers are generally smaller, as measured by NERA-defined Investor Losses. Cases targeting firms located in China also tend to settle for less than comparable cases against domestic firms. Figure 25. Median Settlement Value US vs. Foreign Companies ($Million) Excluding Settlements over $1 Billion, Merger-Objection Cases, and Settlements for $0 Payment to the Class January 2013 December 2017 $12 US $10 $10.0 $9.5 $10.0 Foreign $8.5 $8 $6.9 ($Million) $6 $5.1 $4 $3.7 $3.7 $3.4 $2.8 $2 $ Note: Foreign company status based on country of principal executive offices. Settlement Year 32

118 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 36 of 49 Distribution of Settlement Amounts In 2017, a dearth of moderate and large settlements resulted in a higher proportion of cases that settled for amounts less than $10 million (see Figure 26). This reversed a persistent trend between 2014 and 2016 toward a higher proportion of settlements that exceeded $20 million. As such, in 2017 the distribution of settlements dramatically skewed toward the lower end of the range. Figure 26. Distribution of Settlement Values Excluding Merger-Objection Cases and Settlements for $0 Payment to the Class January 2013 December % 50% Percentage of Settled Cases 40% 30% 20% 61% 58% 58% 51% 51% 10% 0% 19% 17% 17% 15% 14% 13% 13% 14% 12% 13% 11% 9% 10% 7% 6% 7% 7% 8% 5% 6% Less than $10 $10 $19.9 $20 $49.9 $50 $99.9 $100 or Greater Settlement Size ($Million) 33

119 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 37 of 49 The 10 Largest Settlements of Securities Class Actions of 2017 The 10 largest securities class action settlements of 2017 are shown in Table 1. Three of the 10 largest settlements involved defendants in the Health Technology and Services Sector. This contrasts with the preceding two years, in which the majority of large settlements involved financial sector defendants. Overall, these 10 cases accounted for more about $1.2 billion out of about $1.8 billion in aggregate settlements (67%) over the period. The largest settlement, which involved Salix Pharmaceuticals, Ltd., was for $210 million, making up about 11% of total dollars spent on settlements during the year. Table 1. Top Securities Class Action Settlements Plaintiffs Attorneys Total Settlement Fees and Expenses Ranking Case Name Value ($Million) Value ($Million) 1 Salix Pharmaceuticals, Ltd. $210.0 $ BP p.l.c. (2010) $175.0 $ NovaStar Mortgage Funding Trusts $ $ Clovis Oncology, Inc. (2015) $142.0 $ Elan Corporation, plc (2012) $135.0 $ Halliburton Company $100.0 $ J. C. Penney Company, Inc. $97.5 $ Dole Food Company, Inc. (2015) $74.0 $ Rayonier Inc. $73.0 $ Ocwen Financial Corporation $56.0 $17.3 Total $1,227.5 $321.2 Note: 1 The settlement was preliminarily approved on 9 May The final hearing was originally scheduled for 13 September 2017 and later rescheduled for 20 September 2017, but did not occur due to an appeal. At the time of this report s publication, the appeal was pending before the Second Circuit. 34

120 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 38 of 49 These settlements pale in comparison to the largest settlements since passage of the PSLRA. Enron Corp. settled for more than $7.2 billion in aggregate, while Bank of America Corp. settled for more than $2.4 billion in 2013, making it the largest Finance Sector settlement ever (see Table 2). Table 2. Top 10 Securities Class Action Settlements As of 31 December 2017 Codefendant Settlements Total Financial Accounting Plaintiffs Attorneys Settlement Settlement Institutions Firms Fees and Expenses Ranking Defendant Year(s) Value Value Value Value ($Million) ($Million) ($Million) ($Million) 1 ENRON Corp $7,242 $6,903 $73 $798 2 WorldCom, Inc $6,196 $6,004 $103 $530 3 Cendant Corp $3,692 $342 $467 $324 4 Tyco International, Ltd $3,200 No codefendant $225 $493 5 AOL Time Warner Inc $2,650 No codefendant $100 $151 6 Bank of America Corp $2,425 No codefendant No codefendant $177 7 Household International, Inc $1,577 $0 Dismissed $427 8 Nortel Networks (I) 2006 $1,143 No codefendant $0 $94 9 Royal Ahold, NV 2006 $1,100 $0 $0 $ Nortel Networks (II) 2006 $1,074 No codefendant $0 $89 Total $30,298 $13,249 $967 $3,

121 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 39 of 49 Aggregate Settlements We use the term aggregate settlements to denote the total amount of money to be paid to settle litigation by (non-dismissed) defendants based on court-approved settlements during a year. Aggregate settlements were about $1.8 billion in 2017, a drop of more than 70% to a level not seen since 2001 (see Figure 27). This dramatic decline reflects both a drop in the number of standard case settlements in 2017 and the near-record low overall average settlement value. Figure 27. Aggregate Settlement Value by Settlement Size ($Billion) January 2008 December 2017 $12 $11 $10 $9 $11.6 Settlement Size $1 Billion or Greater $500 $999 Million $100 $499 Million $10 $99 Million Less than $10 Million $8 $7.2 ($Billion) $7 $6 $5 $4 $3 $2 $1 $0 $6.6 $6.4 $5.1 $2.4 $4.9 $4.5 $2.6 $0.9 $1.5 $1.1 $1.4 $3.3 $0.8 $2.3 $2.7 $1.8 $2.9 $1.0 $0.7 $1.3 $0.6 $1.3 $2.3 $2.6 $1.8 $0.7 $1.2 $1.2 $1.0 $1.0 $1.2 $1.4 $1.2 $1.1 $0.9 $1.0 $1.0 $1.0 $0.7 $0.3 $0.9 $ Settlement Year 36

122 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 40 of 49 NERA-Defined Investor Losses vs. Settlements As noted above, our proxy for case size, NERA-defined Investor Losses, is a measure of the aggregate amount that investors lost from buying the defendant s stock rather than investing in the broader market during the alleged class period. In general, settlement size grows as NERA-defined Investor Losses grow, but the relationship is not linear. Based on our analysis of data from 1996 to 2017, settlement size grows less than proportionately with Investor Losses. In particular, small cases typically settle for a higher fraction of Investor Losses (i.e., more cents on the dollar) than larger cases. For example, the median ratio of settlement to Investor Loss was 19.2% for cases with Investor Losses of less than $20 million, while it was 0.7% for cases with Investor Losses over $10 billion (see Figure 28). Our findings regarding the ratio of settlement amount to NERA-defined Investor Losses should not be interpreted as the share of damages recovered in settlement but rather as the recovery compared to a rough measure of the size of the case. Notably, the percentages given here apply only to NERA-defined Investor Losses. Use of a different definition of investor losses would result in a different ratio. Also, the use of the ratio alone to forecast the likely settlement amount would be inferior to a proper all-encompassing analysis of the various characteristics shown to impact settlement amounts, as discussed in the next section. Figure 28. Median of Settlement Value as a Percentage of NERA-Defined Investor Losses by Level of Investor Losses Excluding Settlements for $0 Payment to the Class January 1996 December % Settlement Value as a Percentage of Investor Losses 20% 15% 10% 5% 19.2% 8.4% 4.7% 3.2% 2.6% 1.7% 1.4% 1.2% 0.9% 0.7% 0% Less than $20 $20 $49 $50 $99 $100 $199 $200 $399 $400 $599 $600 $999 $1,000 $4,999 $5,000 $9,999 $10,000 or Greater Investor Losses ($Million) 37

123 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 41 of 49 Median NERA-Defined Investor Losses over Time Prior to 2014, median NERA-defined Investor Losses for settled cases had been on an upward trajectory since the passage of the PSLRA. As described above, the median ratio of settlement size to Investor Losses generally decreases as Investor Losses increase. Over time, the increase in median Investor Losses coincided with a decreasing trend in the median ratio of settlement to Investor Losses. Of course, there are year-to-year fluctuations. As shown in Figure 29, the median ratio of settlements to NERA-defined Investor Losses was 2.6% in This was the second consecutive yearly increase and at least a short-term reversal of a long-term downtrend of the ratio between passage of the PSLRA and The increase in the median settlement ratio is to be expected given relatively few settlements of large and moderately-sized cases. Figure 29. Median NERA-Defined Investor Losses and Median Ratio of Settlement to Investor Losses Shareholder Class Actions with Alleged Violations of Rule 10b-5, Section 11, or Section 12 January 2008 December 2017 Median Investor Losses ($Million) $800 $700 $600 $500 $400 $300 $ % $339 $ % 2.4% $584 $ % $ % $ % $ % Median Investor Losses Median Ratio of Settlement to Investor Losses $449 $ % 2.1% 2.6% $ % 2.5% 2.0% 1.5% 1.0% Median Ratio of Settlement to Investor Losses (%) 0.5% $100 $ Settlement Year 0% 38

124 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 42 of 49 Explaining Settlement Amounts The historical relationship between case attributes and other case- and industry-specific factors can be used to measure the factors that are correlated with settlement amounts. NERA has examined settlements in more than 1,000 securities class actions and identified key drivers of settlement amounts, many of which have been summarized in this report. Generally, we find that the following factors have historically been significantly correlated with settlement amounts: NERA-defined Investor Losses (a proxy for the size of the case); The market capitalization of the issuer; Types of securities alleged to have been affected by the fraud; Variables that serve as a proxy for the merit of plaintiffs allegations (such as whether the company has already been sanctioned by a governmental or regulatory agency or paid a fine in connection with the allegations); Admitted accounting irregularities or restated financial statements; The existence of a parallel derivative litigation; and An institution or public pension fund as lead plaintiff. Together, these characteristics and others explain most of the variation in settlement amounts, as illustrated in Figure Figure 30. Predicted vs. Actual Settlements $10BB $1BB Actual Settlement in Log Values $100MM $10MM $1MM $100,000 $100,000 $1MM $10MM $100MM $1BB $10BB Predicted Settlement in Log Values 39

125 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 43 of 49 Trends in Dismissals In 2017, the number of dismissals (excluding merger objections) matched the high of 108 over the last decade (see Figure 31). This was largely due to a substantial increase in voluntary dismissals, which more than doubled. 38 In particular, the number of voluntary dismissals without prejudice increased from two in 2016 to 32 in Out of all voluntary dismissals in 2017, 83% occurred within one year of filing, the highest rate in 10 years and well above the five-year average of 73%. Generally, most voluntary dismissals occur within a year of filing, and the increase in 2017 can partially be attributed to more cases being filed. More filings also occurred in the first quarter of 2017, providing a longer dismissal window. However, filings of standard securities class actions grew at a slower rate in 2017 than in 2011, and growth was only somewhat faster than in Despite that, the number of voluntary dismissals within one year of filing was unchanged in 2011 and fell in each year between 2012 and Figure 31. Number of Dismissed Cases by Case Age Excluding Merger Objections January 2008 December Years Since Filing (Dismissal Type) 2+ Years (Voluntarily Dismissed) 2+ Years (Dismissed) 1 2 Years (Voluntarily Dismissed) Years (Dismissed) <1 Year (Voluntarily Dismissed) <1 Year (Dismissed) Number of Dismissed Federal Cases Dismissal Year 40

126 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 44 of 49 In 2017, 15.7% of standard cases were filed and resolved within the same calendar year, which was the highest rate in at least a decade (see Figure 32). By the end of the year, 12% of cases were voluntarily dismissed, of which the vast majority were voluntary dismissals without prejudice. This may indicate that certain securities cases filed in 2017 were particularly weak, perhaps a result of plaintiffs managing a more diverse portfolio of casework. Alternatively, the dramatic increase in such dismissals may be driven by plaintiff forum selection. 39 The rate of voluntary dismissals was not particularly concentrated in terms of jurisdiction or the specific allegations we track. Figure 32. Year-End Status of Class Actions Filed and Resolved Within Each Calendar Year Excluding Merger Objections January 2008 December % 18% 16% Case Status Settled Voluntarily Dismissed Dismissed 15.7% 14% Percentage of Filings 12% 10% 8% 6% 4% 7.3% 0.9% 5.6% 7.7% 0.5% 4.9% 12.0% 1.9% 7.6% 9.6% 0.6% 7.2% 8.5% 8.3% 2.0% 2.4% 4.6% 4.2% 6.7% 5.1% 12.4% 4.9% 5.4% 9.0% 1.0% 5.2% 12.3% 2% 0% 2.2% 2.5% 2.9% 3.0% 1.8% 2.0% 1.8% 1.1% 2.2% 0.9% 0.6% Filing and Resolution Year 41

127 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 45 of 49 Trends in Attorneys Fees Plaintiffs Attorneys Fees and Expenses Usually, plaintiffs attorneys remuneration is determined as a fraction of any settlement amount in the form of fees, plus expenses. Figure 33 depicts plaintiffs attorneys fees and expenses as a proportion of settlement values over ranges of settlement amounts. The data in the figure exclude settlements of merger-objection cases and cases with no cash payment to the class. A strong pattern is evident in Figure 33: typically, fees grow with settlement size, but less than proportionally (i.e., the fee percentage shrinks as the settlement size grows). To illustrate that the fee percentage typically shrinks as settlement size grows, we grouped settlements by settlement value and reported the median fee percentage for each group. While fees are stable at around 30% of settlement values for settlements below $10 million, this percentage declines as settlement size increases. We also observe that fee percentages have been decreasing over time, except for fees awarded on very large settlements. For settlements above $1 billion, fee rates have increased. Figure 33. Median of Plaintiffs' Attorneys' Fees and Expenses by Size of Settlement Excluding Merger-Objection Cases and Settlements for $0 Payment to the Class Percentage of Settlement Value Settlement Value ($Million) Percentage of Settlement Value % 0.5% 7.6% 1, % 1.5% 14.2% Median Fees Median Expenses 17.7% 0.7% 17.0% 500 and <1, % 0.7% 17.7% 23.4% 1.4% 22.0% 100 and < % 1.3% 23.3% 28.7% 1.9% 26.8% 25 and < % 2.3% 27.3% 32.7% 2.7% 30.0% 10 and < % 2.5% 27.5% 33.7% 3.7% 30.0% 5 and < % 2.9% 32.9% 38.4% 5.1% 33.3% <5 30.0% 4.1% 34.1% 42

128 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 46 of 49 Aggregate Plaintiffs Attorneys Fees and Expenses Aggregate plaintiffs attorneys fees and expenses are the sum of all fees and expenses received by plaintiffs attorneys for all securities class actions that receive judicial approval in a given year. In 2017, aggregate plaintiffs attorneys fees and expenses were $467 million, a drop of about 65% to a level not seen since 2004 (see Figure 34). This decrease in fee amounts partially reflects the trend toward fewer and smaller settlements. However, the drop in aggregate plaintiffs attorneys fees is still less than the 70%+ drop in aggregate settlements, as most cases that settled were smaller, and smaller cases typically have higher fee payout ratios. Note that this figure differs from the other figures in this section, because the aggregate includes fees and expenses that plaintiffs attorneys receive for settlements in which no cash payment was made to the class. Figure 34. Aggregate Plaintiffs Attorneys Fees and Expenses by Settlement Size ($Million) January 2008 December 2017 $1,800 Settlement Sizes $1BB or Greater $10MM $99.9MM $1,600 $500MM $999.9MM Less than $10MM $1,481 $100MM $499.9MM $1,400 $1,330 ($Million) $1,200 $1,000 $800 $600 $400 $946 $89 $839 $155 $65 $277 $418 $738 $217 $123 $639 $604 $143 $112 $142 $169 $1,085 $177 $351 $250 $628 $157 $138 $1,023 $210 $481 $427 $586 $467 $226 $200 $340 $259 $351 $288 $276 $248 $243 $269 $255 $191 $0 $85 $97 $52 $62 $51 $58 $90 $64 $62 $ Settlement Year 43

129 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 47 of 49 Notes 1 This edition of NERA s report on recent trends in securities class action litigation expands on previous work by our colleagues Lucy Allen, Dr. Renzo Comolli, the late Dr. Frederick C. Dunbar, Dr. Vinita M. Juneja, Sukaina Klein, Dr. Denise Neumann Martin, Dr. Jordan Milev, Dr. John Montgomery, Robert Patton, Dr. Stephanie Plancich, and others. The authors also thank Dr. Milev and Benjamin Seggerson for helpful comments on this edition. In addition, we thank Edward Flores and other researchers in NERA s Securities and Finance Practice for their valuable assistance. These individuals receive credit for improving this paper; all errors and omissions are ours. 2 Data for this report have been collected from multiple sources, including Institutional Shareholder Services, Inc., complaints, case dockets, Dow Jones, Bloomberg L.P., FactSet Research Systems Inc., the US Securities and Exchange Commission (SEC) filings, and public press reports. 3 Craig Doidge, G. Andrew Karolyi, and René M. Stulz, The U.S. Listing Gap, National Bureau of Economic Research Working Paper No , May In re Trulia, Inc. Stockholder Litigation, C.A. No CB (Del. Ch. Jan. 22, 2016). 5 Despite a 13% year-over-year drop in US M&A deals in 2016, merger-objection suits doubled from 2015 levels (see Global M&A Review: Full Year 2016 Final Results, Dealogic, January 2017.) The doubling of merger-objection filings again in 2017 far exceeded the 18% increase in deals over the first nine months of 2017 (see Global M&A Review 3Q 2017, Thomson Reuters, October 2017) deal growth and litigation rates obtained from M. D. Cain and S. D. Solomon, A Great Game: The Dynamics of State Competition and Litigation, Iowa Law Review, Vol. 100, No. 165, 2015, Table M&A activity growth obtained from Global M&A Review: Full Year 2016 Final Results, Dealogic, January deal activity obtained from Global M&A Review 3Q 2017, Thomson Reuters, October M. D. Cain and S. D. Solomon, A Great Game: The Dynamics of State Competition and Litigation, Iowa Law Review, Vol. 100, No. 165, M. D. Cain and S. D. Solomon, Takeover Litigation in 2015, Berkeley Center for Law Business and the Economy, 14 January Alison Frankel, Forum Selection Clauses Are Killing Multiforum M&A litigation, Reuters, 24 June In re Trulia, Inc. Stockholder Litigation, C.A. No CB (Del. Ch. Jan. 22, 2016), n M. D. Cain and S. D. Solomon, Takeover Litigation in 2015, Berkeley Center for Law Business and the Economy, 14 January Warren S. de Wied, Delaware Forum Selection Bylaws After Trulia, Harvard Law School Forum on Corporate Governance and Financial Regulation, 25 February In re: Walgreen Co. Stockholder Litigation, No (7th Cir. Aug. 10, 2016). 13 Jones v. WSB Holdings, Inc., No. CAL (Md. Cir. Ct. Nov. 12, 2013). 14 Federal securities class actions that allege violations of Rule 10b-5, Section 11, and/or Section 12 have historically dominated federal securities class action dockets and are often referred to as standard cases. 15 Robert Patton, Recent Trends in US Securities Class Actions against Non-US Companies, NERA Working Paper, 24 October Kane Wu, U.S.-Listed China Firms Hurry Homeward, The Wall Street Journal, 17 November Andrew Bolger, Warning signs appear after bumper IPO year, Financial Times, 26 December U.S. Tech IPO Market Sucked Less In 2017, But Still Managed To Disappoint, VentureBeat, 18 December Why Section 11 Class Actions Are Proliferating In Calif., Law360, 27 April Examples of such forum selection include those used by Blue Apron Holdings (see Blue Apron Holdings, Inc. SEC Form 8-K, filed 5 July 2017), MongoDB (see MongoDB, Inc. SEC Form 8-K, filed 25 October 2017), Restoration Robotics (See Restoration Robotics Inc. SEC Form 8-K, filed 17 October 2017), Roku (see Roku, Inc. SEC Form S-1/A, filed 18 September 2017), and Snap (see Snap, Inc. SEC Form S-1, filed 2 February 2017). 21 Cyan, Inc. v. Beaver County Employees Retirement Fund, Supreme Court No In 2016, several pharmaceutical companies were caught up in a long-running US Department of Justice (DOJ) probe into alleged generic drug price collusion (see Andrew Bolger, U.S. Charges in Generic-Drug Probe to Be Filed by Year-End, Bloomberg Markets, 3 November 2016). In September 2016, a leading poultry distributor sued several poultry producers, alleging price fixing of broiler chickens (see Eric Kroh, Poultry Producers Hit With Chicken Price Antitrust Suit, Law360, 3 September 2016) % of firms in the Third Circuit are in the Pharmaceutical Preparations industry (SIC code 2834), compared with 8% of publicly traded firms. These are mostly incorporated in New Jersey. 24 In re: Walgreen Co. Stockholder Litigation, No (7th Cir. Aug. 10, 2016). 25 In 2016, several pharmaceutical companies were targeted in a long-running DOJ probe and a leading poultry distributor sued several poultry producers, alleging price fixing. See endnote 22 for details and sources. 26 This case was filed after the SEC filed a complaint, more than four years after the end of the proposed class period. The plaintiffs in the class action stated that the SEC complaint first revealed the alleged fraud. 27 Outcomes of the motions for summary judgment are available from NERA but not shown in this report. 28 Active cases equals the sum of pending cases at the beginning of 2017 plus those filed during the year. 29 In 2016, 84% of dismissed merger-objection cases were dismissed within one year of filing. Prior to 2016, a period completely before the Trulia decision, about 66% of such cases were dismissed within a year of filing. 30 In addition to merger objections and standard securities class actions, our database includes a small number of other cases (see Figure 3). 31 Nearly 90% of cases filed before 2012 have been resolved, providing evidence of longerterm trends about dismissal and settlement rates. Data since then is inconclusive given pending litigation. 32 We only consider pending litigation filed after the passage of the PSLRA in The D.C. Circuit was excluded, as it generally has few securities class action filings. 34 Each of the metrics in the Time to Resolution subsection excludes IPO laddering cases and merger-objection cases. 35 In fact, in January 2018, Petrobras agreed to settle its securities class action for $2.95 billion. That settlement has not yet been finalized as of the date of this report. 36 Over the last decade, aggregate NERA-defined Investor Losses peaked at about $1.2 trillion at the end of The axes are in logarithmic scale, and the two largest settlements are excluded from this figure. 38 The number of cases voluntarily dismissed within one year of filing nearly tripled. 39 Commentary regarding a 2017 ruling in the Southern District of New York indicated that [p]laintiffs in [Cheung v. Bristol-Myers Squibb] had originally filed their lawsuits in a federal district court, but after the federal district court issued a ruling that was unfavorable for the plaintiffs, the plaintiffs voluntarily dismissed their lawsuits without prejudice and then refiled them in Delaware state court. See Getting Your Company s Case Removed to Federal Court When Sued in Your Home State, The Legal Intelligencer, 21 December The case referred to is Cheung v. Bristol- Myers Squibb, Case No. 17cv6223 (DLC), (S.D.N.Y. Oct. 12, 2017). 44

130 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 48 of 49 About NERA NERA Economic Consulting ( is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA s economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world s leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation. NERA s clients value our ability to apply and communicate state-of-the-art approaches clearly and convincingly, our commitment to deliver unbiased findings, and our reputation for quality and independence. Our clients rely on the integrity and skills of our unparalleled team of economists and other experts backed by the resources and reliability of one of the world s largest economic consultancies. With its main office in New York City, NERA serves clients from more than 25 offices across North America, Europe, and Asia Pacific. Contacts For further information, please contact: Dr. David Tabak Managing Director New York City: david.tabak@nera.com Stefan Boettrich Senior Consultant New York City: stefan.boettrich@nera.com Svetlana Starykh Senior Consultant White Plains, NY: svetlana.starykh@nera.com The opinions expressed herein do not necessarily represent the views of NERA Economic Consulting or any other NERA consultant. To receive publications, news, and insights from NERA, please visit

131 Case 1:15-cv LLS Document 86-1 Filed 06/29/18 Page 49 of 49 Visit to learn more about our practice areas and global offices. Copyright 2018 National Economic Research Associates, Inc. All rights reserved. Printed in the USA.

132 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 1 of 28 EXHIBIT 2

133 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 2 of 28 Economic and Financial Consulting and Expert Testimony Securities Class Action Settlements 2017 Review and Analysis

134 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 3 of 28 Table of Contents Highlights 1 Author Commentary 2 Total Settlement Dollars 3 Mega Settlements 4 Settlement Size 5 Damages Estimates 6 Rule 10b-5 Claims: Simplified Tiered Damages 6 33 Act Claims: Simplified Statutory Damages 9 Analysis of Settlement Characteristics 11 Accounting Allegations 11 Institutional Investors 12 Derivative Actions 13 Corresponding SEC Actions 14 Time to Settlement and Case Complexity 15 Cornerstone Research s Settlement Prediction Analysis 16 Research Sample 17 Data Sources 17 Endnotes 18 Appendices 19 About the Authors 23 The views expressed in this report are solely those of the authors, who are responsible for the content, and do not necessarily represent the views of Cornerstone Research. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com i

135 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 4 of 28 Table of Figures and Appendices Figure 1: Settlement Statistics 1 Figure 2: Total Settlement Dollars 3 Figure 3: Mega Settlements 4 Figure 4: Distribution of Post Reform Act Settlements 5 Figure 5: Simplified Tiered Damages and Estimated Damages 6 Figure 6: Median and Average Simplified Tiered Damages 7 Figure 7: Median Settlements as a Percentage of Simplified Tiered Damages by Damages Ranges 8 Figure 8: Settlements by Nature of Claims 9 Figure 9: Median Settlements as a Percentage of Simplified Statutory Damages by Damages Ranges 10 Figure 10: Median Settlements as a Percentage of Simplified Tiered Damages and Accounting Allegations 11 Figure 11: Median Settlement Amounts and Public Pension Plans 12 Figure 12: Frequency of Derivative Actions 13 Figure 13: Frequency of SEC Actions 14 Figure 14: Median Settlement by Duration from Filing Date to Settlement Hearing Date 15 Appendix 1: Settlement Percentiles 19 Appendix 2: Select Industry Sectors 19 Appendix 3: Settlements by Federal Circuit Court 20 Appendix 4: Median and Average Settlements as a Percentage of Simplified Tiered Damages 20 Appendix 5: Median and Average Maximum Dollar Loss (MDL) 21 Appendix 6: Median and Average Disclosure Dollar Loss (DDL) 21 Appendix 7: Median Docket Entries by Simplified Tiered Damages Range 22 Analyses in this report are based on 1,697 securities class actions filed after passage of the Private Securities Litigation Reform Act of 1995 (Reform Act) and settled from 1996 through year-end See page 17 for a detailed description of the research sample. For purposes of this report and related research, a settlement refers to a negotiated agreement between the parties to a securities class action that is publicly announced to potential class members by means of a settlement notice. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com ii

136 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 5 of 28 Highlights While the number of settlements in 2017 remained at relatively high levels, total settlement dollars dipped dramatically to $1.5 billion from $6.1 bilion in This decline can be attributed to a large percentage of settlements under $5 million combined with the absence of any settlements over $250 million. There were 81 securities class action settlements approved in 2017, a slight decrease from the number of cases settled in 2016 but the second-highest level since (page 3) The total value of settlements approved by courts in 2017 was $1.5 billion, the second-lowest level in the past 10 years. (page 3) There were four mega settlements settlements of $100 million or more in 2017 (compared to 10 in 2016), accounting for 43 percent of total settlement dollars (compared to 81 percent in 2016). (page 4) The median settlement amount in 2017 was $5.0 million, over 40 percent lower than both the 2016 median ($8.7 million) and the median for all prior post Reform Act settlements ($8.5 million). (page 5) The average settlement amount in 2017 also declined, to $18.2 million. This was 75 percent lower than in 2016 and nearly 70 percent lower than the average for all prior post Reform Act settlements. (page 5) For the first time in more than five years, there were no settlements exceeding $250 million. (page 5) Settlements in 2017 involved smaller cases compared to previous years. In particular, median and average simplified tiered damages in 2017 were the lowest over the last 10 years. (page 7) For 2017 cases with Rule 10b-5 claims, the average settlement amount as a percentage of simplified tiered damages was the highest in the last five years, driven by a sharply higher percentage for smaller cases. (page 8) Cases with companion derivative actions typically settle for higher amounts. In 2017, however, the median settlement for cases with companion derivative actions was lower than for cases without accompanying derivative actions. (page 13) Higher percentages of cases settling within two years of the filing date continued in 2017, reaching over 23 percent of all settlements. (page 15) Figure 1: Settlement Statistics (Dollars in Millions) Number of Settlements 1, Total Amount $93,193.2 $6,118.0 $1,473.6 Minimum $0.1 $0.9 $0.5 Median $8.5 $8.7 $5.0 Average $57.7 $72.0 $18.2 Maximum $8,794.7 $1,608.6 $210.0 Note: Settlement dollars are adjusted for inflation; 2017 dollar equivalent figures are used. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 1

137 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 6 of 28 Author Commentary As projected in our 2016 report, the relatively high volume of settlements continued in 2017 but the number of very large settlements declined, contributing to the substantial drop in the size of settlements overall Findings The decline in settlement sizes can largely be attributed to the smaller size of these cases, reflected in the lower estimates of our proxy for plaintiff-style damages. A combination of low stock market volatility in the years in which the cases were filed, as well as substantially shorter class periods, contributed to the reduction in the damages proxy for cases settled in In addition, 2017 settlements were associated with considerably smaller issuer defendants. The decline in case size leads to other trends. For example, consistent with what we would expect for smaller cases, the time from case filing to settlement was shorter in However, not all developments in 2017 were driven by case size. For example, institutional investors appeared less frequently as lead plaintiffs, even in large cases. Recent literature has discussed the lack of economic incentives for institutions to serve as lead plaintiffs, other than the potential benefit to public pension plans from political contributions by plaintiff attorneys, and has called for reform to improve the lead plaintiff selection process. 1 In addition, the proportion of settled securities class actions accompanied by corresponding derivative actions was among the highest we have observed in more than 15 years. Nearly half of all cases and more than half of all settlements for $5 million or less involved an accompanying derivative action. These results are unexpected since, historically, accompanying derivative actions have been associated with larger class actions and larger settlement amounts. Moreover, they are interesting in light of arguments considering whether derivative litigation is an effective mechanism to monitor corporate governance and whether eliminating derivative litigation altogether may be a viable option. 2 Simplified Tiered Damages In this report we focus on a simplified tiered damages proxy for estimating plaintiff-style damages in cases with Rule 10b-5 claims (see page 6). This replaces the measure traditionally used in settlement research. We view this proxy as an enhancement to settlement research, as this estimate of per-share inflation is conceptually more closely aligned with the typical plaintiff approach. This measure is more fully described in Estimating Damages in Settlement Outcome Modeling. What stands out in 2017 is the drop in mid-range to large settlements, due largely to a reduction in the proxy for damages, as well as the size of the issuer defendant firms involved. Dr. Laura E. Simmons Senior Advisor Cornerstone Research Looking Ahead Recent data on case filings can provide insights into potential settlement trends. See Cornerstone Research s Securities Class Action Filings 2017 Year in Review. The record numbers of cases filed in the previous two years might suggest that the high volume of settlements will continue. However, these data also show higher rates of dismissals, which could offset the increase in filings in terms of settlement activity. The latest data also suggest that smaller firms have become more common targets of securities class actions, but there is no evidence that indicates the unusually low levels of simplified tiered damages observed in 2017 will necessarily continue in upcoming years. On the other hand, recent filings data support the potential continuation of a reduced level of institutional investors serving as lead plaintiffs, whose presence is typically associated with higher settlement amounts. In addition, we expect the rate of settlements for issuers in healthcare and related industry sectors, such as biotech and pharmaceuticals, to persist given the prevalence of these industries among newly filed cases. Laarni T. Bulan, Ellen M. Ryan, and Laura E. Simmons Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 2

138 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 7 of 28 Total Settlement Dollars The total value of settlements approved by courts in 2017 declined substantially to $1.5 billion, less than a quarter of the total amount approved in The median settlement in 2017 was $5.0 million, over 40 percent lower than in While there were only four fewer cases settled in 2017 compared to 2016, the absence of very large settlements (exceeding $250 million) and the decline in the median settlement amount contributed to the decline in 2017 total settlement dollars. The decline in the median settlement amount was primarily driven by a reduction in simplified tiered damages for cases settled in (See page 6 for a discussion of this measure.) The total value of settlements was the second lowest in the last 10 years. Figure 2: Total Settlement Dollars (Dollars in Millions) $6,118 $5,022 $3,146 $4,243 $3,407 $3,662 $3,133 $1,484 $1,189 $1, N= N= N= N= N= N= N= N= N= N=81 Note: Settlement dollars are adjusted for inflation; 2017 dollar equivalent figures are used. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 3

139 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 8 of 28 Mega Settlements There were four mega settlements (settlements equal to or greater than $100 million) in 2017, with the largest settlement amounting to $210 million. Total mega settlement dollars in 2017 were $630 million compared to $5 billion (adjusted for inflation) in Mega settlements have accounted for 70 percent of all settlement dollars from 2008 through 2016, but this percentage varies substantially from year to year. The total value of mega settlements in 2017 was nearly 90 percent lower than in While mega settlements typically comprise the majority of the total value of settled cases, only 43 percent of 2017 settlement dollars came from mega settlements. Figure 3: Mega Settlements Total Mega Settlement Dollars as a Percentage of All Settlement Dollars Number of Mega Settlements as a Percentage of All Settlements 73% 74% 84% 73% 81% 52% 60% 41% 34% 43% 5% 9% 8% 5% 11% 9% 3% 10% 12% 5% Note: Settlement dollars are adjusted for inflation; 2017 dollar equivalent figures are used. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 4

140 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 9 of 28 Settlement Size In 2017, both the number and proportion of settlements less than or equal to $5 million were the highest in the last 10 years. Fifteen cases settled for $2 million or less (historically referred to as nuisance suits ) in As reported in Cornerstone Research s Securities Class Action Filings 2017 Year in Review, three plaintiff law firms (The Rosen Law Firm, Pomerantz LLP, and Glancy Prongay & Murray) have increasingly been appointed as counsel in smaller-than-average cases. 3 In 60 percent of cases settling for $2 million or less, the lead or co-lead plaintiff counsel included at least one of these plaintiff law firms. The respective median and average settlement amounts in 2017 were approximately 40 percent and 70 percent lower than the median and average for all prior post Reform Act settlements. Of the cases settled in 2017, 33 percent were between $5 million and $25 million, compared to 42 percent among all prior post Reform Act settlements, indicating a decline in mid-range settlements. In 2017, 51 percent of settlements were for $5 million or less. Figure 4: Distribution of Post Reform Act Settlements (Dollars in Millions) 30.9% 21.8% 21.3% 23.1% % 18.5% 14.8% 11.8% 8.8% 8.6% 5.1% 3.7% 2.2% 2.5% 2.6% 2.5% 1.4% 1.9% 0.0% 0.0% Less Than $2 $2 $4 $5 $9 $10 $24 $25 $49 $50 $99 $100 $149 $150 $249 $250 $499 >= $500 Note: Settlement dollars are adjusted for inflation; 2017 dollar equivalent figures are used. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 5

141 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 10 of 28 Damages Estimates Rule 10b-5 Claims: Simplified Tiered Damages A key factor in a meaningful analysis of settlement outcomes is a proxy for damages claimed by plaintiffs. Estimating Damages in Settlement Outcome Modeling introduced a new method for estimating that proxy that is conceptually more closely aligned with the approach typically followed by plaintiffs in current securities class action litigation matters. 4 This report concentrates on analysis of simplified tiered damages instead of the simplified estimated damages proxy used in previous reports. Like estimated damages, simplified tiered damages is highly correlated with settlement amounts and has comparable explanatory power in regression analyses of settlement amount determinants. Simplified tiered damages bases per-share inflation estimates on the dollar value of a defendant s stock price movements on the specific dates detailed in the plan of allocation in the settlement notice. When there is a single alleged corrective disclosure date, the measure is calculated using a constant dollar value line that reflects the price change at the end of the class period. When there are multiple dates identified in the settlement notice, the measure is calculated using a tiered dollar value line that reflects the cumulative price changes associated with those dates. 5,6 Generally, simplified tiered damages is smaller than the corresponding estimated damages upon which our historical reports have concentrated, due to differences in the methods used to estimate per-share inflation. 7 As a result, settlements as a percentage of simplified tiered damages is larger than settlements as a percentage of estimated damages. Figure 5: Simplified Tiered Damages and Estimated Damages (Dollars in Millions) $800 $700 $600 $500 $400 $300 $200 $100 Median Settlements as a Percentage of "Simplified Tiered Damages" Median "Simplified Tiered Damages" Median "Estimated Damages" Median Settlements as a Percentage of "Estimated Damages" 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% $ % Note: Damages figures are adjusted for inflation based on class period end dates. Damages are estimated for cases alleging a claim under Rule 10b-5 (whether alone or in addition to other claims). Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 6

142 Damages Estimates (continued) Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 11 of 28 Simplified tiered damages uses simplifying assumptions to estimate per-share damages and trading behavior. It provides a measure of potential shareholder losses that allows for consistency across a large volume of cases, thus enabling the identification and analysis of potential trends. Our prediction models find this measure to be the most important factor in predicting settlement amounts. However, it is not intended to represent actual economic losses borne by shareholders. Determining any such losses for a given case requires more in-depth economic analysis. Median and average simplified tiered damages were at a 10-year low. Simplified tiered damages is correlated with stock market volatility at the time of a case filing. The decline in median and average simplified tiered damages in 2017 is consistent with low stock market volatility in 2014 and 2015, when the majority of cases settled in 2017 were filed. Simplified tiered damages is also correlated with the length of the class period. In 2017, the median class period for settled cases was 32 percent lower than the median in Higher simplified tiered damages are generally associated with larger issuer defendants (measured by total assets or market capitalization of the issuer). In 2017, the median issuer defendant total assets of $547 million was 37 percent smaller than for cases settled over the prior nine years. Figure 6: Median and Average Simplified Tiered Damages (Dollars in Millions) Median Simplified Tiered Damages Average Simplified Tiered Damages $2,361 $2,520 $2,016 $2,118 $838 $857 $859 $799 $534 $142 $178 $331 $225 $374 $217 $193 $190 $195 $130 $ Note: Simplified tiered damages are adjusted for inflation based on class period end dates. Damages are estimated for cases alleging a claim under Rule 10b-5 (whether alone or in addition to other claims). Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 7

143 Damages Estimates (continued) Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 12 of 28 Larger cases typically settle for a smaller percentage of simplified tiered damages. The median settlement as a percentage of simplified tiered damages increased for the second consecutive year, reaching 5.2 percent in 2017 a level in line with the 10-year median. For the smallest cases, the median settlement as a percentage of simplified tiered damages in 2017 increased by more than 120 percent compared to the prior year. The average settlement as a percentage of simplified tiered damages was the highest in the last five years due, in part, to a spike in small cases. As observed over the last decade, smaller cases settle more quickly. Cases with less than $25 million in simplified tiered damages settled within 2.4 years on average, compared to more than 3.8 years for cases with simplified tiered damages of greater than $25 million. Figure 7: Median Settlements as a Percentage of Simplified Tiered Damages by Damages Ranges (Dollars in Millions) 28.6% % 8.2% 6.0% 5.8% 4.4% 4.7% 3.2% 3.9% 3.8% 2.9% 3.1% 2.5% 3.0% 5.6% 5.2% Less Than $25 $25 $74 $75 $149 $150 $249 $250 $499 $500 $999 > $1,000 Total Sample Note: Simplified tiered damages are adjusted for inflation based on class period end dates. Damages are estimated for cases alleging a claim under Rule 10b-5 (whether alone or in addition to other claims). Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 8

144 Damages Estimates (continued) Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 13 of Act Claims: Simplified Statutory Damages For cases involving Section 11 and/or Section 12(a)(2) claims ( 33 Act claims) only, shareholder losses are estimated using a model where alleged inflation per share is the difference between the statutory purchase price and the statutory sales price, referred to here as simplified statutory damages. 8 Only the offered shares are assumed to be eligible for damages. Simplified statutory damages is typically smaller than simplified tiered damages, reflecting differences in the methodology used to estimate alleged inflation per share, as well as differences in the shares eligible to be damaged (i.e., only offered shares are included). In the last decade, cases involving combined claims (Rule 10b-5 and Section 11 and/or Section 12(a)(2) claims) had, on average, nearly 50 percent more docket entries than cases involving only Rule 10b-5 claims indicating the more complex nature of these matters. Among cases settled in 2017, 75 percent of those involving only Section 11 and/or Section 12(a)(2) claims settled within three years from the filing date, while only 53 percent of cases involving Rule 10b-5 claims settled as quickly. Median settlement amounts are substantially higher for cases involving 33 Act claims and Rule 10b-5 allegations than for those with only Rule 10b-5 claims. Figure 8: Settlements by Nature of Claims (Dollars in Millions) Number of Settlements Median Settlement Median Simplified Statutory Damages Median Settlement as a Percentage of Simplified Statutory Damages Section 11 and/or Section 12(a)(2) Only 70 $4.5 $ % Number of Settlements Median Settlement Median Simplified Tiered Damages Median Settlement as a Percentage of Simplified Tiered Damages Both Rule 10b-5 and Section 11 and/or Section 12(a)(2) 135 $12.8 $ % Rule 10b-5 Only 552 $7.8 $ % Note: Settlement dollars and damages are adjusted for inflation; 2017 dollar equivalent figures are used. Damages are adjusted for inflation based on class period end dates. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 9

145 Damages Estimates (continued) Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 14 of 28 Similar to cases with Rule 10b-5 claims, settlements as a percentage of simplified statutory damages for cases with only 33 Act claims are smaller for cases that have larger damages. Over the period , the average settlement as a percentage of simplified statutory damages with a named underwriter defendant was 12.8 percent, compared to 7.4 percent without a named underwriter defendant. Since 2008, 84 percent of settled cases with only 33 Act claims had a named underwriter defendant. Figure 9: Median Settlements as a Percentage of Simplified Statutory Damages by Damages Ranges (Dollars in Millions) 12.4% 9.2% 7.5% 3.5% Less Than $50 N = 25 $50 $149 N = 23 >= $150 N = 22 Total Sample N = 70 Note: Simplified statutory damages are adjusted for inflation based on class period end dates; 2017 dollar equivalent figures are used. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 10

146 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 15 of 28 Analysis of Settlement Characteristics Accounting Allegations This analysis examines three types of accounting issues among settled cases involving Rule 10b-5 claims: (1) alleged GAAP violations, (2) restatements, and (3) reported accounting irregularities. 9 For further details regarding settlements of accounting cases, see Cornerstone Research s annual report on Accounting Class Action Filings and Settlements. The proportion of settled cases alleging GAAP violations in 2017 was 53 percent, continuing a three-year decline from a high of 67 percent in Settled cases with restatements are generally associated with higher settlements as a percentage of simplified tiered damages compared to cases without restatements. Of cases settled in the prior nine years with accountingrelated allegations, 23 percent involved a named auditor codefendant. In 2017, this dropped to 13 percent. The infrequency of reported accounting irregularities among settled cases continued for the third straight year. Figure 10: Median Settlements as a Percentage of Simplified Tiered Damages and Accounting Allegations Accounting Irregularities 9.0% Alleged GAAP Violations 6.3% No Alleged GAAP Violations 4.5% Restatement 7.6% No Restatement 4.8% No Accounting Irregularities 5.2% N=447 N=240 N=246 N=441 N=48 N=639 Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 11

147 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 16 of 28 Analysis of Settlement Characteristics (continued) Institutional Investors Institutions, including public pension plans (a subset of institutional investors) tend to be involved in cases with higher simplified tiered damages. The decline in public pension plan involvement in 2017 settlements in part reflects the smaller cases involved. However, even within larger cases (e.g., cases with simplified tiered damages greater than $50 million), public pension plans were less frequently involved in 2017 than in prior years. In 2017, 39 percent of settlements with simplified tiered damages greater than $50 million involved a public pension plan as lead plaintiff, compared to 48.6 percent for The proportion of settlements with a public pension plan as lead plaintiff declined to the lowest level over the past 10 years. Cases in which public pension plans serve as lead or colead plaintiff are typically associated with larger issuer defendants, longer class periods, securities in addition to common stock, accounting allegations, and other indicators of more serious cases, such as criminal charges. These cases are also associated with longer intervals from filing to settlement. (See page 15 for additional details regarding length of time from filing to settlement.) Figure 11: Median Settlement Amounts and Public Pension Plans (Dollars in Millions) Public Pension Plan as Lead Plaintiff No Public Pension Plan as Lead Plaintiff $23 $19 $20 $17 38% 33% 34% $11 40% $26 46% $24 44% $13 37% $21 38% $18 Percentage of Settlements with Public Pension Plan as Lead Plaintiff 41% $15 32% $7 $6 $4 $3 $4 $5 $3 $6 $ Note: Settlement dollars are adjusted for inflation; 2017 dollar equivalent figures are used. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 12

148 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 17 of 28 Analysis of Settlement Characteristics (continued) Derivative Actions Derivative cases accompanying securities class actions, as described in previous annual reports, are more frequently filed when corresponding securities class actions involve a financial statement restatement or public pension plan lead plaintiff. As discussed in Piling On? An Empirical Study of Parallel Derivative Suits, 10 there is substantial overlap between plaintiff attorneys that tend to file accompanying derivative actions and attorneys that are frequent players in securities class actions. Since most derivative actions are filed as piggyback suits to class actions, the latter finding is consistent with plaintiff counsel who are not selected for lead counsel representation in certain securities class actions choosing to follow up with derivative actions. The increase in the proportion of settled cases involving an accompanying derivative action was driven by a surge in derivative cases corresponding to relatively small settlements. Of cases settling for $5 million or less in 2017, 51 percent were accompanied by derivative actions, compared to 37 percent for the prior nine years. Historically, cases involving accompanying derivative actions have tended to settle for higher amounts. In 2017, however, the median settlement for cases with companion derivative actions was $4.3 million, compared to $6.2 million for cases without accompanying derivative actions. The percentage of settled cases involving an accompanying derivative action was one of the highest in the last 10 years. Figure 12: Frequency of Derivative Actions Settlements without a Companion Derivative Action Settlements with a Companion Derivative Action Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 13

149 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 18 of 28 Analysis of Settlement Characteristics (continued) Corresponding SEC Actions Cases with a corresponding SEC action related to the allegations are typically associated with significantly higher settlement amounts and higher settlements as a percentage of simplified tiered damages. 11 Compared to , the relatively high level of class actions settled over the last three years with corresponding SEC actions is consistent with the SEC s stated focus on financial reporting and disclosure matters during this period. 12 Cases with corresponding SEC actions tend to involve larger issuer defendants. For cases settled during , average assets for issuer defendant firms were $135 billion for cases with corresponding SEC actions, compared to only $31 billion for cases without a corresponding SEC action. Corresponding SEC actions are also frequently associated with delisted firms. Out of the total 159 settlements during involving cases with corresponding SEC actions, 63 cases (40 percent) involved issuer defendants that had been delisted. Over 20 percent of settled cases involved a corresponding SEC action. Figure 13: Frequency of SEC Actions Settlements without a Corresponding SEC Action Settlements with a Corresponding SEC Action Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 14

150 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 19 of 28 Time to Settlement and Case Complexity In 2017, more than 23 percent of cases settled within two years of the filing date, compared to less than 16 percent during Rule 10b-5 cases settling in less than two years in 2017 had median simplified tiered damages of only $85 million, compared to a median of $130 million for all settlements in Historically, cases that have taken longer to settle have been associated with higher settlements. The median settlement amount for cases taking more than two years to settle was two times the median settlement amount for cases that settled within two years. Consistent with the decline in settlement size in 2017, a smaller proportion (17 percent) of cases settled at least four years after filing, compared to 33 percent during The average time from filing to settlement was the lowest in the past decade. The number of docket entries associated with a case at the time of settlement (see Appendix 7) is highly correlated with the time to settlement, as well as factors that add to case complexity, such as third-party defendants. Accordingly, this variable has been used in prior research as a proxy for the effort incurred by plaintiff counsel in litigating the securities class actions. 13 The number of docket entries at the time of settlement is a statistically significant explanatory variable in regression analyses of settlement outcome determinants (see page 16). Figure 14: Median Settlement by Duration from Filing Date to Settlement Hearing Date (Dollars in Millions) $15.4 $12.8 $13.7 $8.1 $9.3 $6.6 $3.8 $3.0 $3.9 $3.6 Less Than 2 Years N=108 N= Years N=206 N= Years N=153 N= Years N=88 N=4 More Than 5 Years N=138 N=10 Note: Settlement dollars are adjusted for inflation; 2017 dollar equivalent figures are used. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 15

151 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 20 of 28 Cornerstone Research s Settlement Prediction Analysis This research applies regression analysis to examine the relationships between settlement outcomes and certain security case characteristics. Regression analysis is employed to better understand and predict the total settlement amount, given the characteristics of a particular securities case. Regression analysis can also be applied to estimate the probabilities associated with reaching alternative settlement levels. It is also helpful in exploring hypothetical scenarios, including how the presence or absence of particular factors affect predicted settlement amounts. Determinants of Settlement Outcomes Based on the research sample of post Reform Act cases that settled through December 2017, the factors that were important determinants of settlement amounts included the following: Simplified tiered damages Maximum Dollar Loss (MDL) Most recently reported total assets of the issuer defendant firm Number of entries on the lead case docket The year in which the settlement occurred Whether a restatement of financials related to the alleged class period was announced Whether there was a corresponding SEC action against the issuer, other defendants, or related parties Whether Section 11 and/or Section 12(a) claims were alleged in addition to Rule 10b-5 claims Whether the issuer defendant was distressed Whether a public pension was a lead plaintiff Whether the plaintiffs alleged that securities other than common stock were damaged Regression analyses shows that settlements were higher when simplified tiered damages, MDL, issuer defendant asset size, or the number of docket entries were larger, or when Section 11 and/or Section 12(a) claims were alleged in addition to Rule 10b-5 claims. Settlements were also higher in cases involving financial restatements, a corresponding SEC action, a public pension involved as lead plaintiff, or securities other than common stock alleged to be damaged. Settlements were lower if the settlement occurred in 2010 or later, or if the issuer was distressed. Almost 75 percent of the variation in settlement amounts can be explained by the factors discussed above. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 16

152 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 21 of 28 Research Sample Data Sources The database used in this report focuses on cases alleging fraudulent inflation in the price of a corporation s common stock (i.e., excluding cases with alleged classes of only bondholders, preferred stockholders, etc., and excluding cases alleging fraudulent depression in price and M&A cases). The sample is limited to cases alleging Rule 10b-5, Section 11, and/or Section 12(a)(2) claims brought by purchasers of a corporation s common stock. These criteria are imposed to ensure data availability and to provide a relatively homogeneous set of cases in terms of the nature of the allegations. The current sample includes 1,697 securities class actions filed after passage of the Reform Act (1995) and settled from 1996 through These settlements are identified based on a review of case activity collected by Securities Class Action Services LLC (SCAS). 14 The designated settlement year, for purposes of this report, corresponds to the year in which the hearing to approve the settlement was held. 15 Cases involving multiple settlements are reflected in the year of the most recent partial settlement, provided certain conditions are met. 16 In addition to SCAS, data sources include Dow Jones Factiva, Bloomberg, the Center for Research in Security Prices (CRSP) at University of Chicago Booth School of Business, Standard & Poor s Compustat, court filings and dockets, SEC registrant filings, SEC litigation releases and administrative proceedings, LexisNexis, and public press. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 17

153 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 22 of 28 Endnotes 1 See Adam C. Pritchard and Stephen J. Choi, Lead Plaintiffs and Their Lawyers: Mission Accomplished, or More to Be Done?, Harvard Law School Forum on Corporate Governance and Financial Regulation, May 25, See also Charles Silver and Sam Dinkin, Incentivizing Institutional Investors to Serve as Lead Plaintiffs in Securities Fraud Class Actions, DePaul Law Review 57, no. 2 (2008). 2 See Kevin LaCroix, Should Shareholder Derivative Litigation Be Eliminated?, The D&O Diary, October 4, 2017; and Stephen Bainbridge, Is There a Case for Abolishing Derivative Litigation?, ProfessorBainbridge.com, October 3, See Securities Class Action Filings 2017 Year in Review, Cornerstone Research (2018), page 35. Among 2017 settlements, The Rosen Law Firm and Pomerantz LLP have identifiable lead or co-lead roles. 4 See Estimating Damages in Settlement Outcome Modeling, Cornerstone Research (2017). Note that simplified tiered damages referenced in the current report is identical to the measure referred to as tiered damages in Estimating Damages in Settlement Outcome Modeling. 5 Simplified tiered damages is calculated for cases that settled after Importantly, the simplified tiered damages approach used for purposes of settlement research does not examine the mix of information associated with the specific dates listed in the plan of allocation, but simply applies the stock price movements on those dates to an estimate of the true value of the stock during the alleged class period (or value line ). The dates used to identify the applicable value line may be supplemented with information from the operative complaint at the time of settlement. 6 Damages calculations have two components, an estimate of the inflation per share and an estimate of the number of shares damaged. Both simplified tiered damages and estimated damages, as well as the proxy discussed in this report for plaintiff-style damages in 33 Act cases, use a similar methodology to estimate the number of shares damaged. In particular, these damages proxies utilize an estimate of the number of shares damaged based on reported trading volume and the number of shares outstanding. Specifically, reported trading volume is adjusted using volume reduction assumptions based on the exchange on which the issuer defendant s common stock is listed. No adjustments are made to the underlying float for institutions, insiders, or short-selling activity. Because of these and other simplifying assumptions, the damages measures used in settlement outcome modeling are overstated relative to damages estimates developed in conjunction with case-specific economic analysis. 7 As described in prior reports, per-share inflation for estimated damages for cases involving Rule 10b-5 claims is calculated using a market-adjusted, backward-pegged value line. 8 The statutory purchase price is the lesser of the security offering price or the security purchase price. Prior to the first complaint filing date, the statutory sales price is the price at which the security was sold. After the first complaint filing date, the statutory sales price is the greater of the security sales price or the security price on the first complaint filing date. Similar to simplified tiered damages, the estimation of simplified statutory damages makes no adjustments to the underlying float for institutions, insiders, or short-selling activity. 9 The three categories of accounting issues analyzed in this report are: (1) GAAP violations cases with allegations involving Generally Accepted Accounting Principles (GAAP); (2) restatements cases involving a restatement (or announcement of a restatement) of financial statements; and (3) accounting irregularities cases in which the defendant has reported the occurrence of accounting irregularities (intentional misstatements or omissions) in its financial statements. 10 Stephen J. Choi, Jessica Erickson, and Adam C. Pritchard, Piling On? An Empirical Study of Parallel Derivative Suits, Journal of Empirical Legal Studies 14, no. 4 (2007): It could be that the merits in such cases are stronger, or simply that the presence of an accompanying SEC action provides plaintiffs with increased leverage when negotiating a settlement. For purposes of this research, an SEC action is evidenced by the presence of a litigation release or an administrative proceeding posted on 12 For example, see Andrew Ceresney, Director, Division of Enforcement, U.S. Securities and Exchange Commission, Directors Forum 2016 Keynote Address (San Diego, CA, January 25, 2016). 13 See Laura Simmons, The Importance of Merit-Based Factors in the Resolution of 10b-5 Litigation, University of North Carolina at Chapel Hill Doctoral Dissertation (1996); and Michael A. Perino, Institutional Activism through Litigation: An Empirical Analysis of Public Pension Fund Participation in Securities Class Actions, St. John s Legal Studies Research Paper No (2006). 14 Available on a subscription basis. 15 Movements of partial settlements between years can cause differences in amounts reported for prior years from those presented in earlier reports. 16 This categorization is based on the timing of the settlement approval. If a new partial settlement equals or exceeds 50 percent of the then-current settlement fund amount, the entirety of the settlement amount is re-categorized to reflect the settlement hearing date of the most recent partial settlement. If a subsequent partial settlement is less than 50 percent of the then-current total, the partial settlement is added to the total settlement amount and the settlement hearing date is left unchanged. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 18

154 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 23 of 28 Appendices Appendix 1: Settlement Percentiles (Dollars in Millions) Average 10th 25th Median 75th 90th 2017 $18.2 $1.5 $2.5 $5.0 $15.0 $ $72.0 $1.9 $4.3 $8.7 $33.7 $ $40.7 $1.4 $2.2 $6.7 $16.8 $ $18.9 $1.7 $3.0 $6.2 $13.6 $ $76.1 $2.0 $3.2 $6.8 $23.3 $ $65.4 $1.3 $2.9 $10.1 $37.9 $ $22.8 $2.0 $2.7 $6.3 $19.6 $ $40.1 $2.2 $4.8 $12.6 $28.1 $ $42.9 $2.7 $4.4 $9.1 $22.9 $ $32.4 $2.3 $4.3 $9.1 $21.6 $ $43.5 $1.7 $3.5 $8.3 $21.3 $74.1 Note: Settlement dollars are adjusted for inflation; 2017 dollar equivalent figures are used. Appendix 2: Select Industry Sectors (Dollars in Millions) Industry Number of Settlements Median Settlement Median Simplified Tiered Damages Median Settlement as a Percentage of Simplified Tiered Damages Technology 109 $9.8 $ % Financial 113 $21.2 $ % Telecommunications 49 $8.0 $ % Retail 44 $6.6 $ % Pharmaceuticals 88 $8.6 $ % Healthcare 19 $8.0 $ % Note: Settlement dollars and simplified tiered damages are adjusted for inflation; 2017 dollar equivalent figures are used. Simplified tiered damages are calculated only for cases involving Rule 10b-5 claims. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 19

155 Appendices (continued) Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 24 of 28 Appendix 3: Settlements by Federal Circuit Court (Dollars in Millions) Circuit Number of Settlements Median Settlement Median Settlement as a Percentage of Simplified Tiered Damages First 24 $ % Second 185 $ % Third 63 $ % Fourth 27 $ % Fifth 40 $ % Sixth 33 $ % Seventh 38 $ % Eighth 19 $ % Ninth 191 $ % Tenth 19 $ % Eleventh 47 $ % DC 4 $ % Note: Settlement dollars are adjusted for inflation; 2017 dollar equivalent figures are used. Settlements as a percentage of simplified tiered damages calculated only for cases alleging Rule 10b-5 claims. Appendix 4: Median and Average Settlements as a Percentage of Simplified Tiered Damages % 14.8% Median Settlement as a % of "Simplified Tiered Damages" Average Settlement as a % of "Simplified Tiered Damages" 10.7% 11.4% 11.5% 8.5% 8.6% 9.0% 9.4% 8.6% 5.7% 6.3% 4.9% 5.1% 4.5% 6.8% 4.9% 4.2% 4.8% 5.2% Note: Simplified tiered damages are calculated only for cases alleging Rule 10b-5 claims. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 20

156 Appendices (continued) Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 25 of 28 Appendix 5: Median and Average Maximum Dollar Loss (MDL) (Dollars in Millions) Median MDL Average MDL $11,935 $9,543 $8,557 $8,901 $4,474 $3,915 $3,841 $4,422 $3,384 $1,740 $810 $879 $922 $791 $1,043 $1,005 $960 $668 $957 $ Note: MDL is adjusted for inflation based on class period end dates. MDL is the dollar value change in the defendant firm s market capitalization from the trading day with the highest market capitalization during the class period to the trading day immediately following the end of the class period. Appendix 6: Median and Average Disclosure Dollar Loss (DDL) (Dollars in Millions) Median DDL Average DDL $1,547 $1,321 $1,288 $682 $736 $467 $514 $588 $104 $122 $315 $89 $110 $186 $83 $92 $69 $158 $82 $ Note: DDL is adjusted for inflation based on class period end dates. DDL is the dollar value change in the defendant firm s market capitalization between the trading day immediately preceding the end of the class period and the trading day immediately following the end of the class period. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 21

157 Appendices (continued) Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 26 of 28 Appendix 7: Median Docket Entries by Simplified Tiered Damages Range (Dollars in Millions) Less Than $50 $50 $99 $100 $249 $250 $499 > $500 Note: Simplified tiered damages are adjusted for inflation; 2017 dollar equivalent figures are used. Simplified tiered damages are calculated only for cases alleging Rule 10b-5 claims. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 22

158 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 27 of 28 About the Authors Laarni T. Bulan Ph.D., Columbia University; M.Phil., Columbia University; B.S., University of the Philippines Laarni Bulan is a principal in Cornerstone Research s Boston office, where she specializes in finance. Her work has focused on securities damages and class certification issues, insider trading, merger valuation, risk management, market manipulation and trading behavior, and real estate markets. She has also consulted on cases related to financial institutions and the credit crisis, municipal bond mutual funds, asset-backed commercial paper conduits, credit default swaps, foreign exchange, and securities clearing and settlement. Dr. Bulan has published several academic articles in peer-reviewed journals. Her research covers topics in dividend policy, capital structure, executive compensation, corporate governance, and real options. Prior to joining Cornerstone Research, Dr. Bulan had a joint appointment at Brandeis University as an assistant professor of finance in its International Business School and in the economics department. Ellen M. Ryan M.B.A., American Graduate School of International Management; B.A., Saint Mary s College Ellen Ryan is a director in Cornerstone Research s Boston office, where she works in the securities practice. Ms. Ryan has consulted on economic and financial issues in a variety of cases, including securities class actions, financial institution breach of contract matters, and antitrust litigation. She also has worked with testifying witnesses in corporate governance and breach of fiduciary duty matters. Prior to joining Cornerstone Research, Ms. Ryan worked for Salomon Brothers in New York and Tokyo. Currently she focuses on post Reform Act settlement research as well as general practice area business and research. Laura E. Simmons Ph.D., University of North Carolina at Chapel Hill; M.B.A., University of Houston; B.B.A., University of Texas at Austin Laura Simmons is a senior advisor with Cornerstone Research. She is a certified public accountant and has more than 25 years of experience in accounting practice and economic and financial consulting. Dr. Simmons has focused on damages and liability issues in securities litigation, as well as on accounting issues arising in a variety of complex commercial litigation matters. She has served as a testifying expert in cases involving accounting analyses, securities case damages, research on securities lawsuits, and other issues involving empirical analyses. Dr. Simmons s research on pre and post Reform Act securities litigation settlements has been published in a number of reports and is frequently cited in the public press and legal journals. She has spoken at various conferences and appeared as a guest on CNBC addressing the topic of securities case settlements. She has also published in academic journals, with recent research focusing on the intersection of accounting and litigation. Dr. Simmons was previously an accounting faculty member at the Mason School of Business at the College of William & Mary. From 1986 to 1991, she was an accountant with Price Waterhouse. The authors acknowledge the research efforts and significant contributions of their colleagues at Cornerstone Research. Please direct any questions and requests for additional information to the settlement database administrator at settlement.database@cornerstone.com. Many publications quote, cite, or reproduce data, charts, or tables from Cornerstone Research reports. The authors request that you reference Cornerstone Research in any reprint, quotation, or citation of the charts, tables, or data reported in this study. Securities Class Action Settlements 2017 Review and Analysis cornerstone.com 23

159 Case 1:15-cv LLS Document 86-2 Filed 06/29/18 Page 28 of 28 Boston Chicago London Los Angeles New York San Francisco Silicon Valley Washington cornerstone.com 2018 by Cornerstone Research. All rights reserved. Cornerstone Research is a registered service mark of Cornerstone Research, Inc. C and design is a registered trademark of Cornerstone Research, Inc.

160 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 1 of 31 EXHIBIT 3

161 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 2 of 31 LEVI&KORSINSKY LLP New York 30 Broad Street 24th Floor New York, NY Toll Free T F Washington, D.C th Street NW Suite 115 Washington, D.C T F Connecticut 733 Summer Street Suite 304 Stamford, CT T California Los Angeles 445 South Figueroa Street 31st Floor Los Angeles, CA T San Francisco 44 Montgomery Street Suite 650 San Francisco, CA T F

162 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 3 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA ABOUT THE FIRM Levi & Korsinsky, LLP is a national law firm with decades of combined experience litigating complex securities, class, and consumer actions in state and federal courts throughout the country. Our main office is located in New York City and we also maintain offices in Connecticut, California, and Washington, D.C. We represent the interests of aggrieved shareholders in class action and derivative litigation through the vigorous prosecution of corporations that have committed securities fraud and boards of directors who have breached their fiduciary duties. We have served as Lead and Co-Lead Counsel in many precedent setting litigations, recovered millions of dollars for shareholders via securities fraud lawsuits, and obtained fair value, multi-billion dollar settlements in merger transactions. We also represent clients in high-stakes consumer class actions against some of the largest corporations in America. Our legal team has a long and successful track record of litigating high-stakes, resource-intensive cases and consistently achieving results for our clients. Our attorneys are highly skilled and experienced in the field of securities class action litigation. They bring a vast breadth of knowledge and skill to the table and, as a result, are frequently appointed Lead Counsel in complex shareholder and consumer litigations in various jurisdictions. We are able to allocate substantial resources to each case, reviewing public documents, interviewing witnesses, and consulting with experts concerning issues particular to each case. Our attorneys are supported by exceptionally qualified professionals including financial experts, investigators, and administrative staff, as well as cutting-edge technology and e-discovery systems. Consequently, we are able to quickly mobilize and produce excellent litigation results. Our ability to try cases, and win them, results in substantially better recoveries than our peers. We do not shy away from uphill battles indeed, we routinely take on complex and challenging cases, and we prosecute them with integrity, determination, and professionalism. a model for how [the] great legal profession should conduct itself. Justice Timothy S. Driscoll in Grossman v. State Bancorp, Inc., Index No /2011 (N.Y. Sup. Ct. Nassau Cnty. Nov. 29, 2011) PRACTICE AREAS Securities Fraud Class Actions We prosecute claims on behalf of investors to recover losses suffered as a result of securities fraud, including the manipulation of a company s stock price by its executives, officers, directors, and advisors such as underwriters and accountants, through the issuance of false and misleading information. Our firm has been appointed Lead Counsel in numerous class actions filed in both federal and state courts across the country. In E-Trade Financial Corp. Securities Litigation, No. 07-cv-8538 (S.D.N.Y. 2007), we were selected from a crowded field as Co-Lead Counsel for a landmark securities fraud class action that arose out of the mortgage crisis. Our successful prosecution of the case resulted in a $79 million recovery for the shareholder class. We have been appointed Lead or Co-Lead Counsel in the following securities class actions: Chahal v. Credit Suisse Group AG, 1:18-cv AT (S.D.N.Y. June 21, 2018) In re Bitconnect Sec. Litig., 9:18-cv DMM (S.D. Fla. June 19, 2018) 1

163 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 4 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA In re Aqua Metals Sec. Litig., 4:17-cv HSG (N.D. Cal. May 23, 2018) Davy v. Paragon Coin, Inc., 4:18-cv JSW (N.D. Cal. May 10, 2018) Rensel v. Centra Tech, Inc., 17-cv JLK (S.D. Fla. Apr. 11, 2018) Cullinan v. Cemtrex, Inc. 2:17-cv (E.D.N.Y. Mar. 3, 2018) Emerson v. Genocea Biosciences, Inc., 1:17-cv (D. Mass. Feb. 2, 2018) In re Navient Corporation Sec. Litig., 1:17-cv RBK-AMD (D.N.J. Feb. 2, 2018) Abouzied v. Applied Optoelectronics, Inc., 4:17-cv-2399 (S.D. Tex. Jan. 22, 2018) Huang v. Depomed, Inc., 3:17-cv JST (N.D. Cal. Dec. 8, 2017) In re Regulus Therapeutics Inc. Sec. Litig., 3:17-cv BTM-RBB (D. Mass. Oct. 26, 2017) Mahoney v. Foundation Medicine, Inc., 1:17-cv LTS (D. Mass. Oct. 20, 2017) Murphy III v. JBS S.A., 1:17-cv ILG-RER (E.D.N.Y. Oct. 10, 2017) Goldsmith v. Weibo Corporation, 2:17-cv SRC-CLW (D.N.J. Sept. 28, 2017) Waterford Township Police and Fire Retirement System v. Mattel, Inc., 2:17-cv VAP-KS (C.D. Cal. Sept. 9, 2017) In re U.S. Steel Consolidated Cases, Civil Action No CB (W.D. Pa. Aug. 16, 2017) Hinshaw v. Neurotrope, Inc., 1:17-cv LGS (S.D.N.Y. Aug. 10, 2017) Ohren v. Amyris, Inc., 3:17-cv WHO (N.D. Cal. Aug. 8, 2017) Rodriguez v. Gigamon Inc., 5:17-cv EJD (N.D. Cal. July 26, 2017) Beezley v. Fenix Parts, Inc., 2:17-cv (D.N.J. June 28, 2017) M & M Hart Living Trust v. Global Eagle Entertainment, Inc., 2:17-cv (C.D. Cal. June 26, 2017) Maurer v. Argos Therapeutics, Inc., 1:17-cv (M.D.N.C. June 23, 2017) Ruedelstei v. U.S. Concrete, Inc., 4:17-cv-266 (N.D. Tex. June 22, 2017) In re Aratana Therapeutics, Inc. Sec. Litig., 1:17-cv-880 (S.D.N.Y. June 6, 2017) In re Insys Therapeutics, Inc., 1:17-cv-1954 (S.D.N.Y. May 31, 2017) Clevlen v. Anthera Pharmaceuticals, Inc., 3:17-cv (N.D. Cal. May 18, 2017) In re Agile Therapeutics, Inc. Sec. Litig., 3:17-cv AET-LHG (D.N.J. May 15, 2017) Chupka v. Pearson Plc., 1:17-cv-1422 (S.D.N.Y. May 9, 2017) Roper v. SITO Mobile Ltd., 2:17-cv ES-MAH (D.N.J. May 8, 2017) In re Egalet Corporation Sec. Litig., 2:17-cv (E.D.Pa. May 1, 2017) In re Illumina, Inc. Sec. Litig., 3:16-cv L-KSC (S.D. Cal. Mar. 30, 2017) In re Arrowhead Pharmaceuticals, Inc., 2:16-cv PSG-PJW (C.D. Cal. Mar. 8, 2017) Michael Gregory v ProNAi, 1:16-cv PAE (Mass. Sup. Ct. Feb. 1, 2017) Rossbach v. VASCO Data Security Int l Inc., 1:15-cv (N.D. Ill. Dec. 1, 2016) In re PTC Therapeutics, Inc., 2:16-cv KM-MAH (D.N.J. Nov. 14, 2016) Schwab v. E*Trade Financial Corporation, 1:16-cv JGK (S.D.N.Y. Nov. 9, 2016) Wilbush v. Ambac Financial Group, Inc., Civ. No. 1:16-cv RMB (S.D.N.Y. Oct. 11, 2016) The TransEnterix Investor Group v. TransEnterix, Inc., 5:16-cv D (E.D.N.C. Aug. 30, 2016) Magro v. Freeport-McMoran Inc., 2:16-cv DJH (D. Ariz. Aug. 19, 2016) 2

164 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 5 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Gormley v. magicjack VocalTec Ltd., 1:16-cv VM (S.D.N.Y. July 12, 2016) Azar v. Blount Int l Inc., Civ. No. 3:16-cv SI (D. Or. July 1, 2016) Plumley v. Sempra Energy, 3:16-cv BEN-RBB (S.D. Cal. June 6, 2016) Francisco v. Abengoa, S.A., 1:15-cv ER (S.D.N.Y. May 24, 2016) Harrington v. Tetraphase Pharmaceuticals, Inc., Civ. No. 1:16-cv LTS (D. Mass. May 13, 2016) De Vito v. Liquid Holdings Group, Inc., 2:15-cv KM-JBC (D.N.J. Apr. 7, 2016) In re OvaScience Inc. Stockholder Litig., C.A. No BLS2 (Mass. Super. Ct. Apr. 2, 2016) Ford v. Natural Health Trends Corp., 2:16-cv TJH-AFM (C.D. Cal. Mar. 29, 2016) Bai v. TCP International Holdings Ltd., 1:16-cv DCN (N.D. Ohio Mar. 18, 2016) Meier v. Checkpoint Systems, Inc., 1:15-cv (D.N.J. Jan. 1, 2016) Messner v. USA Technologies, Inc., 2:15-cv MAK (E.D. Pa. Dec. 15, 2015) Levin v. Resource Capital Corp., 1:15-cv LLS (S.D.N.Y. Nov. 24, 2015) Messerli v. Root 9B Technologies, Inc., 1:15-cv WYD (D. Colo. Oct. 14, 2015) Martin v. Altisource Residential Corp., 1:15-cv (D.V.I. Oct. 7, 2015) Paggos v. Resonant, Inc., 2:15-cv SJO (VBKx) (C.D. Cal. Aug. 7, 2015) Fragala v. 500.com Ltd., 2:15-cv MMM (C.D. Cal. July 7, 2015) Stevens v. Quiksilver Inc., 8:15-cv JVS-JCGx. (C.D. Cal. June 26, 2015) In re Ocean Power Technologies, Inc. Sec. Litig., (FLW) (LHG) (D.N.J. Mar. 17, 2015) In re Energy Recovery Inc. Sec. Litig., 3:15-cv (N.D. Cal. Jan. 20, 2015) Klein v. TD Ameritrade Holding Corp., 3:14-cv (D. Neb. Dec. 2, 2014) In re China Commercial Credit Sec. Litig., 1:15-cv (ALC) (D.N.J. Oct. 31, 2014) In re Violin Memory, Inc. Sec. Litig., 4:13-cv YGR (N.D. Cal. Feb. 26, 2014) Berry v. Kior, Inc., 4:13-cv (S.D. Tex. Nov. 25, 2013) In re OCZ Technology Group, Inc. Sec. Litig., 3:12-cv RS (N.D. Cal. Jan. 4, 2013) In re Digital Domain Media Group, Inc. Sec. Litig., 12-CIV (JEM) (S.D. Fla. Sept. 20, 2012) Zaghian v. THQ, Inc., 2:12-cv GAF-JEM (C.D. Cal. Sept. 14, 2012) Derivative, Corporate Governance & Executive Compensation We protect shareholders by enforcing the obligations of corporate fiduciaries. We are a leader in achieving important corporate governance reforms for the benefit of shareholders. Our efforts include the prosecution of derivative actions in courts around the country, making pre-litigation demands on corporate boards to investigate misconduct and taking remedial action for the benefit of shareholders. In situations where a company s board responds to a demand by commencing its own investigation, we frequently work with the board s counsel to assist with and monitor the investigation, ensuring that the investigation is thorough and conducted in an appropriate manner. We also have successfully prosecuted derivative and class action cases to hold corporate executives and board members accountable for various abuses and to help preserve corporate assets through longlasting and meaningful corporate governance changes, thus ensuring that prior misconduct does not reoccur. We have extensive experience challenging executive compensation, recapturing assets for the benefit of companies and their shareholders. In addition, we have secured corporate governance 3

165 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 6 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA changes to ensure that executive compensation is consistent with shareholder-approved compensation plans, company performance, and federal securities laws. In MacCormack v. Groupon, Inc., C.A. No GMS (D. Del. 2013), we caused the cancellation of $2.3 million worth of restricted stock units granted to a company executive in violation of a shareholderapproved plan, as well as the adoption of enhanced corporate governance procedures designed to ensure that the board of directors complies with the terms of the plan; we also obtained additional material disclosures to shareholders in connection with a shareholder vote on amendments to the plan. In Scherer v. Lu, (Diodes Incorporated), No GMS, 2014 U.S. Dist. LEXIS (D. Del. 2014), we secured the cancellation of $4.9 million worth of stock options granted to the company s CEO in violation of a shareholder-approved plan, and obtained additional disclosures to enable shareholders to cast a fullyinformed vote on the adoption of a new compensation plan at the company s annual meeting. In Edwards v. Benson, (Headwaters Incorporated), (D. Utah 2014), we caused the cancellation of $3.2 million worth of stock appreciation rights granted to the company s CEO in violation of a shareholderapproved plan and the adoption of enhanced corporate governance procedures designed to ensure that the board of directors complies with the terms of the plan. In Pfeiffer v. Begley, (DeVry, Inc.), (Cir. Ct. DuPage Cty., Ill. 2012), we secured the cancellation of $2.1 million worth of stock options granted to the company s CEO in in violation of a shareholder-approved incentive plan. In Basch v. Healy (D. Del. 2014), we obtained a cash payment to the company to compensate for equity awards issued to officers in violation of the company s compensation plan and caused significant changes in the company s compensation policies and procedures designed to ensure that future compensation decisions are made consistent with the company s plans, charters and policies. We also impacted the board s creation of a new compensation plan and obtained additional disclosures to stockholders concerning the board s administration of the company s plan and the excess compensation. In Pfeiffer v. Toll (Toll Brothers Derivative Litigation), C.A. No VCL (Del. Ch. 2010), we prevailed in defeating defendants motion to dismiss in a case seeking disgorgement of profits that company insiders reaped through a pattern of insider-trading. After extensive discovery, we secured a settlement returning $16.25 million in cash to the company, including a significant contribution from the individuals who traded on inside information. In Kleba v. Dees, C.A (Tenn. Cir. Ct. Knox Cty. 2014), we recovered approximately $9 million in excess compensation given to insiders and the cancellation of millions of shares of stock options issued in violation of a shareholder-approved compensation plan. In addition, we obtained the adoption of formal corporate governance procedures designed to ensure that future compensation decisions are made independently and consistent with the plan. In Lopez v. Nudelman, (CTI BioPharma Corp.), SEA (Wash. Super. Ct. King Cnty. 2015), we recovered approximately $3.5 million in excess compensation given to directors and obtained the adoption of a cap on director compensation, as well as other formal corporate governance procedures designed to implement best practices with regard to director and executive compensation. In In re i2 Technologies, Inc. Shareholder Litigation, C.A. No CC (Del. Ch. 2008), as Counsel for the Lead Plaintiff, we challenged the fairness of certain asset sales made by the company and secured a $4 million recovery. In In re Activision, Inc. Shareholder Derivative Litigation, No. 06-cv MRP (JTLX) (C.D. Cal. 2008), we were Co-Lead Counsel and challenged executive compensation related to the dating of options. This effort resulted in the recovery of more than $24 million in excessive compensation and expenses, as well as the implementation of substantial corporate governance changes. 4

166 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 7 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA In In re Corinthian Colleges, Inc. Shareholder Derivative Litigation, 8:06cv777-AHS (C.D. Cal. 2006), we were Co-Lead Counsel and achieved a $2 million benefit for the company, resulting in the re-pricing of executive stock options and the establishment of extensive corporate governance changes. In Pfeiffer v. Alpert (Beazer Homes Derivative Litigation), C.A. No. 10-cv-1063-PD (D. Del. 2010), we successfully challenged certain aspects of the company s executive compensation structure, ultimately forcing the company to improve its compensation practices. In In re Cincinnati Bell, Inc., Derivative Litigation, Case No. A (Ohio, Hamilton Cty. 2012), we achieved significant corporate governance changes and enhancements related to the company s compensation policies and practices in order to better align executive compensation with company performance. Reforms included the formation of an entirely independent compensation committee with staggered terms and term limits for service. In Woodford v. Mizel (M.D.C. Holdings, Inc.), 1:2011cv00879 (D. Del. 2012), we challenged excessive executive compensation, ultimately obtaining millions of dollars in reductions of that compensation, as well as corporate governance enhancements designed to implement best practices with regard to executive compensation and increased shareholder input. In Bader v. Goldman Sachs Group, Inc., No cv, 2011 WL (2d Cir. Dec. 19, 2011), we persuaded the Second Circuit Court of Appeals to reverse the District Court s dismissal of derivative claims seeking to recover excessive compensation granted to officers and directors of Goldman Sachs. In In re Google Inc. Class C Shareholder Litigation, C.A. No CS (Del. Ch. 2012), we challenged a stock recapitalization transaction to create a new class of nonvoting shares and strengthen the corporate control of the Google founders. We helped achieve an agreement that provided an adjustment payment to shareholders in the event of certain discounts in the price of Google stock, and provided enhanced board scrutiny of the Google founders ability to transfer stock, including the implementation of a new procedure for a waiver or modification of the founders Transfer Restriction Agreement. Mergers & Acquisitions We have achieved an impressive record in obtaining injunctive relief for shareholders and are one of the premier law firms engaged in mergers & acquisitions and takeover litigation, where we strive to maximize shareholder value. In these cases, we regularly fight to obtain settlements that enable the submission of competing buyout bid proposals, thereby increasing consideration for shareholders. We have litigated landmark cases that have altered the landscape of mergers & acquisitions law and resulted in multi-million dollar awards to aggrieved shareholders. In In re Great Wolf Resorts, Inc. Shareholder Litigation, C.A. No VCN (Del. Ch. 2012), we achieved tremendous results for shareholders, including partial responsibility for a $93 million (57%) increase in merger consideration and the waiver of several don t-ask-don t-waive standstill agreements that were restricting certain potential bidders from making a topping bid for the company. In In re CNX Gas Corp. Shareholder Litigation, 4 A.3d 397 (Del. Ch. 2010), as Plaintiffs Executive Committee Counsel, we obtained a landmark ruling from the Delaware Chancery Court that set forth a unified standard for assessing the rights of shareholders in the context of freeze-out transactions and ultimately led to a common fund recovery of over $42.7 million for the company s shareholders. In In re Talecris Biotherapeutics Holdings Shareholder Litigation, C.A. No VCL (Del. Ch. 2010), we served as counsel for one of the Lead Plaintiffs, achieving a settlement that increased the merger consideration to Talecris shareholders by an additional 500,000 shares of the acquiring company s stock and providing shareholders with appraisal rights. 5

167 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 8 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA In In re Minerva Group LP v. Mod-Pac Corp., Index No /2013 (N.Y. Sup. Ct. Erie Cty. 2013), we obtained a settlement in which defendants increased the price of an insider buyout from $8.40 to $9.25 per share, representing a recovery of $2.4 million for shareholders. In Stephen J. Dannis v. J.D. Nichols, C.A. No. 13-CI (Ky. Cir. Ct. Jefferson Cty. 2014), as Co-Lead Counsel, we obtained a 23% increase in the merger consideration (from $7.50 to $9.25 per unit) for shareholders of NTS Realty Holdings Limited Partnership. The total benefit of $7.4 million was achieved after two years of hard-fought litigation, challenging the fairness of the going-private, squeeze-out merger by NTS s controlling unitholder and Chairman, Defendant Jack Nichols. The unitholders bringing the action alleged that Nichols proposed transaction grossly undervalued NTS s units. The 23% increase in consideration was a remarkable result given that on October 18, 2013, the Special Committee appointed by the Board of Directors had terminated the existing merger agreement with Nichols. Through counsel s tenacious efforts the transaction was resurrected and improved. In In re Craftmade International, Inc. Shareholders Litigation, C.A. No VCL (Del. Ch. 2011), we served as Co-Lead Counsel and successfully obtained an injunction requiring numerous corrective disclosures and a Fort Howard release announcing that the Craftmade Board of Directors was free to conduct discussions with any other potential bidders for the company. In Dias v. Purches, C.A. No VCG (Del. Ch. 2012), Vice Chancellor Sam Glasscock, III of the Delaware Chancery Court partially granted shareholders motion for preliminary injunction and ordered that defendants correct a material misrepresentation in the proxy statement related to the acquisition of Parlux Fragrances, Inc. by Perfumania Holding, Inc. In Forgo v. Health Grades, Inc., C.A. No VCS (Del. Ch. 2010), as Co-Lead Counsel, our attorneys established that defendants had likely breached their fiduciary duties to Health Grades shareholders by failing to maximize value as required under Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986). We secured an agreement with defendants to take numerous steps to seek a superior offer for the company, including making key modifications to the merger agreement, creating an independent committee to evaluate potential offers, extending the tender offer period, and issuing a Fort Howard release affirmatively stating that the company would participate in good faith discussions with any party making a bona fide acquisition proposal. In Chen v. Howard-Anderson, C.A. No 5878-VCL (Del. Ch. 2010), we represented shareholders in challenging the merger between Occam Networks, Inc. and Calix, Inc., obtaining a preliminary injunction against the merger after showing that the proxy statement by which the shareholders were solicited to vote for the merger was materially false and misleading. We then took the case to trial and recovered $35 million for the shareholders. In In re Pamrapo Bancorp Shareholder Litigation, Docket C (N.J. Ch. Hudson Cty. 2011) & HUD-L (N.J. Law Div. Hudson Cty. 2015), we defeated defendants motion to dismiss shareholders class action claims for money damages and a motion for summary judgment, ultimately securing a settlement recovering $1.95 million for the Class plus the Class s legal fees and expenses up to $1 million (representing an increase in consideration of 15-23% for the members of the Class). The case stemmed from the sale of Pamrapo Bancorp to BCB Bancorp at an allegedly unfair price through an unfair process. In addition to obtaining this recovery, the Court also found that our efforts substantially benefited the shareholders by obtaining supplemental disclosures for shareholders ahead of the merger vote. In In re Complete Genomics, Inc. Shareholder Litigation, C.A. No VCL (Del. Ch. 2012), we obtained preliminary injunctions of corporate merger and acquisition transactions, and Plaintiffs successfully enjoined a don t-ask-don t-waive standstill agreement. In In re Integrated Silicon Solution, Inc. Stockholder Litigation, Lead Case No. 115CV (Super. Ct. Santa Clara, CA 2015), we won an injunction requiring corrective disclosures concerning don t-ask-don twaive standstill agreements and certain financial advisor conflicts of interests, and contributed to the 6

168 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 9 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA integrity of a post-agreement bidding contest that led to an increase in consideration from $19.25 to $23 per share, a bump of almost 25 percent. In In re Bluegreen Corp. Shareholder Litigation, Case No CA (Cir. Ct. for Palm Beach Cty., FL), as Co-Lead Counsel, we achieved a common fund recovery of $36.5 million for minority shareholders in connection with a management-led buyout, increasing gross consideration to shareholders in connection with the transaction by 25% after three years of intense litigation. Consumer Litigation Levi & Korsinsky works hard to protect consumers by holding corporations accountable for defective products, false and misleading advertising, overcharging, and unfair or deceptive business practices. Our litigation and class action expertise combined with our in-depth understanding of federal and state laws enables us to fight for consumers who purchased defective products, including automobiles, appliances, electronic goods, and home products, as well as consumers who were deceived by consumer service providers such as banks and insurance, credit card, or phone companies. The quality of the representation has been extremely high, not just in terms of the favorable outcome in terms of the substance of the settlement, but in terms of the diligence and the hard work that has gone into producing that outcome. The Honorable Joseph F. Bianco, in Landes v. Sony Mobile Communications, 17-cv JFB-SIL (E.D.N.Y. Dec. 1, 2017) In NV Security, Inc. v. Fluke Networks, Case No. CV GW (SSx) (C.D. Cal. 2005), we negotiated a settlement on behalf of purchasers of Test Set telephones in an action alleging that the Test Sets contained a defective 3-volt battery. We benefited the consumer class by obtaining the following relief: free repair of the 3-volt battery, reimbursement for certain prior repair, an advisory concerning the 3-volt battery on the outside of packages of new Test Sets, an agreement that defendants would cease to market and/or sell certain Test Sets, and a 42-month warranty on the 3-volt battery contained in certain devices sold in the future. In Bustos v. Vonage America, Inc., Case No. 06 Civ (HAA) (D.N.J. 2006), our firm achieved a common fund settlement of $1.75 million on behalf of class members who purchased Vonage Fax Service in an action alleging that Vonage made false and misleading statements in the marketing, advertising, and sale of Vonage Fax Service by failing to inform consumers that the protocol Defendant used for the Vonage Fax Service was unreliable and unsuitable for facsimile communications. In Masterson v. Canon U.S.A., Case No. BC (Cal. Super. Ct. L.A. Cty. 2006), we represented purchasers of Cannon SD Cameras in an action alleging that liquid crystal display ( LCD ) screens on Cannon SD Cameras cracked, broke, or otherwise malfunctioned, and obtained refunds for certain broken LCD repair charges and important changes to the product warranty. 7

169 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 10 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA OUR ATTORNEYS Managing Partners Eduard Korsinsky For more than 20 years Eduard Korsinsky has represented clients in securities cases, derivative actions, consumer fraud, and complex commercial matters. He has been named a New York Super Lawyer by Thomson Reuters and is recognized as one of the country s leading practitioners in class and derivative matters. Mr. Korsinsky also has served as an editor of the American Bar Association s Securities Litigation Section s newsletter and is a member of the American Bar Association s Derivative Suits Subcommittee. Cases which he has litigated include: E-Trade Financial Corp. Sec. Litig., No. 07-cv-8538 (S.D.N.Y. 2007), $79 million recovery In re Activision, Inc. S holder Derivative Litig., No. 06-cv MRP (JTLX)(C.D. Cal. 2006), recovered $24 million in excess compensation Corinthian Colleges, Inc., S holder Derivative Litig., SACV AHS (C.D. Cal. 2009), obtained repricing of executive stock options providing more than $2 million in benefits to the company Pfeiffer v. Toll, C.A. No VCL (Del. Ch. 2010), $16.25 million in insider trading profits recovered In re Net2Phone, Inc. S holder Litig., Case No N (Del. Ch. 2005), obtained increase in tender offer price from $1.70 per share to $2.05 per share In re Pamrapo Bancorp S holder Litig., C (N.J. Ch. Hudson Cty. 2011) & HUD-L (N.J. Law Div. Hudson Cty. 2015), obtained supplemental disclosures following the filing of a motion for preliminary injunction, pursued case post-closing, defeated motion for summary judgment, and obtained an increase in consideration of between 15-23% for the members of the Class In re Google Inc. Class C S holder Litig., C.A. No (Del. Ch. 2012), obtained payment ladder indemnifying investors up to $8 billion in losses stemming from trading discounts expected to affect the new stock Woodford v. M.D.C. Holdings, Inc., 1:2011cv00879 (D. Del. 2012), one of a few successful challenges to say on pay voting, recovered millions of dollars in reductions to compensation i2 Technologies, Inc. S holder Litig., C.A. No CC (Del. Ch. 2008), $4 million recovered, challenging fairness of certain asset sales made by the company Pfeiffer v. Alpert (Beazer Homes), C.A. No. 10-cv-1063-PD (D. Del. 2011), obtained substantial revisions to an unlawful executive compensation structure In re NCS Healthcare, Inc. Sec. Litig., C.A. CA 19786, (Del. Ch. 2002), case settled for approximately $100 million Paraschos v. YBM Magnex Int l, Inc., No. 98-CV-6444 (E.D. Pa.), United States and Canadian cases settled for $85 million Canadian Education New York University School of Law, LL.M. Master of Law(s) Taxation (1997) 8

170 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 11 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Brooklyn Law School, J.D. (1995) Brooklyn College, B.S., Accounting, summa cum laude (1992) Admissions New York (1996) New Jersey (1996) United States District Court for the Southern District of New York (1998) United States District Court for the Eastern District of New York (1998) United States Court of Appeals for the Second Circuit (2006) United States Court of Appeals for the Third Circuit (2010) United States District Court for the Northern District of New York (2011) United States District Court of New Jersey (2012) United States Court of Appeals for the Sixth Circuit (2013) Publications Delaware Court Dismisses Compensation Case Against Goldman Sachs, ABA Section of Securities Litigation News & Developments (Nov. 7, 2011) SDNY Questions SEC Settlement Practices in Citigroup Settlement, ABA Section of Securities Litigation News & Developments (Nov. 7, 2011) New York Court Dismisses Shareholder Suit Against Goldman Sachs, ABA Section of Securities Litigation News & Developments (Oct. 31, 2011) Joseph E. Levi Joseph E. Levi is a central figure in shaping and managing the Firm s securities litigation practice. Mr. Levi has been lead or co-lead in dozens of cases involving the enforcement of shareholder rights in the context of mergers & acquisitions and securities fraud. In addition to his involvement in class action litigation, he has represented numerous patent holders in enforcing their patent rights in areas including computer hardware, software, communications, and information processing, and has been instrumental in obtaining substantial awards and settlements. Mr. Levi and the attorneys achieved success on behalf of the former shareholders of Occam Networks, Inc. in litigation challenging the Company s merger with Calix, Inc., obtaining a preliminary injunction against the merger due to material representations and omissions in the proxy statement by which the shareholders were solicited to vote. See Chen v. Howard-Anderson, No VCL (Del. Ch. Jan. 24, 2011). Vigorous litigation efforts continued to trial, recovering $35 million for the shareholders. Another victory for Mr. Levi and the attorneys was in litigation challenging the acquisition of Health Grades, Inc. by affiliates of Vestar Capital Partners, L.P., where it was successfully demonstrated to the Delaware Court of Chancery that the defendants had likely breached their fiduciary duties to Health Grades shareholders by failing to maximize value as required by Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986). See Weigard v. Hicks, No VCS (Del. Ch. Sept. 3, 2010). This ruling was used to reach a favorable settlement in which defendants agreed to a host of measures designed to increase the likelihood of superior bid. Vice Chancellor Strine applaud[ed] the litigation team for their preparation and the extraordinary high-quality of the briefing. He and the attorneys also played a 9

171 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 12 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA prominent role in the matter of In re CNX Gas Corp. Shareholders Litigation, C.A. No VCL (Del. Ch. 2010), in which plaintiffs recovered a common fund of over $42.7 million for stockholders. Education Brooklyn Law School, J.D., magna cum laude (1995) Polytechnic University, B.S., summa cum laude (1984); M.S. (1986) Admissions New York (1996) New Jersey (1996) United States Patent and Trademark Office (1997) United States District Court for the Southern District of New York (1997) United States District Court for the Eastern District of New York (1997) [The court] appreciated very much the quality of the argument, the obvious preparation that went into it, and the ability of counsel... Vice Chancellor Sam Glasscock, III in Dias v. Purches, C.A. No VCG (Del. Ch. Apr. 5, 2012) Partners Adam M. Apton Adam M. Apton focuses his practice on investor protection. He represents institutional investors and high net worth individuals in securities fraud, corporate governance, and shareholder rights litigation. Prior to joining the firm, Mr. Apton defended corporate clients against complex mass tort, commercial, and products liability lawsuits. Thomson Reuters selected Mr. Apton to the Super Lawyers Washington, DC Rising Stars list for the years 2016 and 2017, a distinction given to only the top 2.5% of lawyers. Mr. Apton currently serves as court-appointed lead counsel in several class action lawsuits throughout the United States: Carlton v. Cannon (KiOR Inc.), 4:13-cv (LHR) (S.D. Tex.), federal class action securities fraud lawsuit against former officers of biofuel firm KiOR, Inc., featured on CBS s 60 Minutes In re Energy Recovery Inc. Sec. Litig., 3:15-cv (N.D. Cal.), federal class action lawsuit alleging securities fraud violations against company and former chief executive officer for false projections and reports of finances and operations Cortina v. Anavex Life Sciences Corp., 1:15-cv JMF (S.D.N.Y.), federal class action lawsuit for market manipulation against biopharmaceutical company for promoting itself as extraordinary investment opportunity based on supposed cure for Alzheimer s Disease Rux v. Meyer (Sirius XM Holdings Inc.), No (Del. Ch.), shareholder rights lawsuit against SiriusXM s Board of Directors for engaging in harmful related-party transactions with controlling stockholder, John. C. Malone and Liberty Media Corp. 10

172 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 13 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Stadnick v. Vivint Solar, Inc., No (2d Cir.), federal class action lawsuit alleging violations under the Securities Act of 1933 in connection with misleading initial public offering documents Mr. Apton s past representations and successes include: In re Violin Memory Inc. Sec. Litig., 4: 13-cv YGR (N.D. Cal.) (settlement of $7.5 million over allegations of false statements in initial public offering documents concerning sales to government sector) Roby v. Ocean Power Technologies, Inc., 3:14-cv-3799-FLW-LHG (D.N.J.) (settlement fund of $3 million and 380,000 shares of common stock in response to allegations over failed technology) Maritime Asset Management, LLC v. NeurogesX, Inc., 4: 12-cv YGR (N.D. Cal.) (recovery of $1.25 million on behalf of private offering class) Monson v. Friedman (Associated Estates Realty Corp.), 1:14-cv PAG (N.D. Ohio) (revoking improperly awarded stock options and implementing corporate governance preventing reoccurrence of similar violations) In re OCZ Technology Group, Inc. Sec. Litig., 3:12-cv RS (N.D. Cal.) (settlement fund of $7.5 million over allegations of accounting fraud relating to improper revenue recognition) Education New York Law School, J.D., cum laude (2009), where he served as Articles Editor of the New York Law School Law Review and interned for the New York State Supreme Court, Commercial Division University of Minnesota, B.A., Entrepreneurial Management & Psychology, With Distinction (2006) Admissions New York (2010) United States District Court for the Southern District of New York (2010) United States District Court for the Eastern District of New York (2010) District of Columbia (2013) United States Court of Appeals for the Ninth Circuit (2015) United States Court of Appeals for the Second Circuit (2016) United States Court of Appeals for the Third Circuit (2016) California (2017) United States District Court for the Northern District of California (2017) United States District Court for the Central District of California (2017) United States District Court for the Southern District of California (2017) Donald J. Enright During his 20 years as a litigator and trial lawyer, Mr. Enright has handled matters in the fields of securities, commodities, consumer fraud and commercial litigation, with a particular emphasis on shareholder M&A and securities fraud class action litigation. He has been named as a Washington, D.C. Super Lawyer by Thomson Reuters for several consecutive years, and as one of Washington s Top Lawyers by Washingtonian magazine. 11

173 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 14 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Mr. Enright has shown a track record of achieving victories in federal trials and appeals, including: Nathenson v. Zonagen, Inc., 267 F. 3d 400, 413 (5th Cir. 2001) SEC v. Butler, 2005 U.S. Dist. LEXIS 7194 (W.D. Pa. April 18, 2005) Belizan v. Hershon, 434 F. 3d 579 (D.C. Cir. 2006) Most recently, as Co-Lead Counsel in In re Bluegreen Corp. Shareholder Litigation, Case No CA (Cir. Ct. for Palm Beach Cnty., Fla.), Mr. Enright achieved a $36.5 million common fund settlement in the wake of a majority shareholder buyout, representing a 25% increase in total consideration to the minority stockholders. Similarly, in In re CNX Gas Corp. Shareholders Litigation, C.A. No VCL (Del. Ch. 2010), in which Levi & Korsinsky served upon plaintiffs Executive Committee, Mr. Enright helped obtain the recovery of a common fund of over $42.7 million for stockholders. Mr. Enright has also played a leadership role in numerous securities and shareholder class actions from inception to conclusion. His leadership has produced multi-million dollar recoveries in shareholder class actions involving such companies as: Allied Irish Banks PLC Iridium World Communications, Ltd. En Pointe Technologies, Inc. PriceSmart, Inc. Polk Audio, Inc. Meade Instruments Corp. Xicor, Inc. Streamlogic Corp. Interbank Funding Corp. Riggs National Corp. UTStarcom, Inc. Manugistics Group, Inc. Mr. Enright also has a successful track record of obtaining injunctive relief in connection with shareholder M&A litigation, having won preliminary injunctions or other injunctive relief in the cases of: In re Portec Rail Products, Inc. S holder Litig., G.D (Ct. Com. Pleas Pa. 2010) In re Craftmade International, Inc. S holder Litig., C.A. No VCL (Del. Ch. 2011) Dias v. Purches, C.A. No VCG (Del. Ch. 2012) In re Complete Genomics, Inc. S holder Litig., C.A. No VCL (Del. Ch. 2012) In re Integrated Silicon Solution, Inc. Stockholder Litig., Lead Case No. 115CV (Sup. Ct. Santa Clara, CA 2015) Mr. Enright has also demonstrated considerable success in obtaining deal price increases for shareholders in M&A litigation. As Co-Lead Counsel in the matter of In re Great Wolf Resorts, Inc. Shareholder Litigation, C.A. No VCN (Del. Ch. 2012), Mr. Enright was partially responsible for a $93 million (57%) increase in merger consideration and waiver of several don t-ask-don t-waive standstill agreements that were precluding certain potential bidders from making a topping bid for the company. 12

174 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 15 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Similarly, Mr. Enright served as Co-Lead Counsel in the case of Berger v. Life Sciences Research, Inc., No. SOM-C (NJ Sup. Ct. 2009), which caused a significant increase in the transaction price from $7.50 to $8.50 per share, representing additional consideration for shareholders of approximately $11.5 million. And most recently, representing a substantial institutional investor, Mr. Enright served as Co-Lead Counsel in Minerva Group, LP v. Keane, Index No /2013 (NY Sup. Ct. of Erie Cnty.), and obtained a settlement in which Defendants increased the price of an insider buyout from $8.40 to $9.25 per share. The courts have consistently recognized and praised the quality of Mr. Enright s work. In In re Interbank Funding Corp. Securities Litigation (D.D.C ), Judge Bates of the United States District Court for the District of Columbia observed that Mr. Enright had...skillfully, efficiently, and zealously represented the class, and... worked relentlessly throughout the course of the case. Similarly, in Freeland v. Iridium World Communications, LTD, (D.D.C ), Judge Nanette Laughrey stated that Mr. Enright had done an outstanding job in connection with the recovery of $43.1 million for the shareholder class. And, in the matter of Osieczanek v. Thomas Properties Group, C.A. No VCG (Del. Ch. 2013), Vice Chancellor Sam Glasscock of the Chancery Court of Delaware observed that it s always a pleasure to have counsel [like Mr. Enright] who are articulate and exuberant in presenting their position, and that Mr. Enright s prosecution of a merger case was wholesome and served as a model of... plaintiffs litigation in the merger arena. Education George Washington University School of Law, J.D. (1996), where he was a Member Editor of The George Washington University Journal of International Law and Economics from 1994 to 1996 Drew University, B.A., Political Science and Economics, cum laude (1993) Admissions Maryland (1996) New Jersey (1996) United States District Court for the District of Maryland (1997) United States District Court for the District of New Jersey (1997) District of Columbia (1999) United States Court of Appeals for the Fourth Circuit (1999) United States Court of Appeals for the Fifth Circuit (1999) United States District Court for the District of Columbia (1999) United States Court of Appeals for the District of Columbia (2004) United States Court of Appeals for the Second Circuit (2005) United States Court of Appeals for the Third Circuit (2006) United States District Court for the District of Colorado (2017) Publications SEC Enforcement Actions and Investigations in Private and Public Offerings, Securities: Public and Private Offerings, Second Edition, West Publishing

175 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 16 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Dura Pharmaceuticals: Loss Causation Redefined or Merely Clarified? J. Tax n & Reg. Fin. Inst. September/October 2007, Page 5 I think you ve done a superb job and I really appreciate the way this case was handled. The Honorable Ronald B. Rubin in Teoh v. Ferrantino, C.A. No (Cir. Ct. for Montgomery Cnty., MD 2012) Shannon L. Hopkins Shannon L. Hopkins manages the Firm s Connecticut office. She was selected in 2013 as a New York Super Lawyer by Thomson Reuters. For more than a decade Ms. Hopkins has been prosecuting a wide range of complex class action matters in securities fraud, mergers and acquisitions, and consumer fraud litigation on behalf of individuals and large institutional clients. Ms. Hopkins has played a lead role in numerous shareholder securities fraud and merger and acquisition matters and has been involved in recovering multimillion dollar settlements on behalf of shareholders, including: In re Force Protection, Inc. S holder Litig., C.A. No. A B (D. Nev. 2015), $11 million shareholder recovery Craig Telke v. New Frontier Media, Inc., C.A. No. 1:12-cv JLK (D. Co. 2015), $2.25 million shareholder recovery Shona Investments v. Callisto Pharmaceuticals, Inc., C.A. No /2012 (NY Sup. Ct. 2015), shareholder recovery of $2.5 million and increase in exchange ratio from to E-Trade Financial Corp. S holder Litig., No. 07-cv-8538 (S.D.N.Y. 2007), $79 million recovery for the shareholder class In re Cogent, Inc. S holder Litig., C.A. No VCP (Del. Ch. 2010), $1.9 million shareholder recovery and corrective disclosures relating to the Merger In re CMS Energy Sec. Litig., Civil No. 02 CV (GCS) (E.D. Mich. Sept. 6, 2007), $200 million recovery In re Sears, Roebuck and Co. Sec. Litig., No. 02-cv (N.D. Ill. Jan. 8, 2007), $200 million recovery In re El Paso Electric Co. Sec. Litig., C.A. No. 3:03-cv DB (W.D. Tex. Sept. 15, 2005), $10 million recovery In re Novastar Fin. Sec. Litig., 4:04-cv ODS (W.D. Mo. Apr. 14, 2009), $7.25 million recovery The quality of Ms. Hopkin s work has been noted by courts. In In re Health Grades, Inc. Shareholder Litigation, C.A. No VCS (Del. Ch. 2010), where Ms. Hopkins was significantly involved with the briefing of the preliminary injunction motion, then Vice Chancellor Strine applaud[ed] Co-Lead Counsel for their preparation and the extraordinary high-quality of the briefing. In addition to her legal practice, Ms. Hopkins is a Certified Public Accountant (1998 Massachusetts). Prior to becoming an attorney, Ms. Hopkins was a senior auditor with PricewaterhouseCoopers LLP, where she led audit engagements for large publicly held companies in a variety of industries. 14

176 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 17 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Education Suffolk University Law School, J.D., magna cum laude (2003), where she served on the Journal for High Technology and as Vice Magister of the Phi Delta Phi International Honors Fraternity Bryant University, B.S.B.A., Accounting and Finance, cum laude (1995), where she was elected to the Beta Gamma Sigma Honor Society Admissions Massachusetts (2003) United States District Court for the District of Massachusetts (2004) New York (2004) United States District Court for the Southern District of New York (2004) United States District Court for the Eastern District of New York (2004) United States District Court for the District of Colorado (2004) United States Court of Appeals for the First Circuit (2008) United States Court of Appeals for the Third Circuit (2010) Connecticut (2013) Publications Cybercrime Convention: A Positive Beginning to a Long Road Ahead, 2 J. High Tech. L. 101 (2003) In appointing the Firm Lead Counsel, the Honorable Gary Allen Feess noted our significant prior experience in securities litigation and complex class actions. Zaghian v. THQ, Inc., 2:12-cv GAF-JEM (C.D. Cal. Sept. 14, 2012) Nancy A. Kulesa Nancy A. Kulesa has extensive experience in complex litigation in federal and state courts, including securities litigation, Employee Retirement Income Security Act of 1974 (ERISA) litigation, consumer fraud litigation, mergers and acquisitions cases, and antitrust litigation. Ms. Kulesa is involved in all of the Firm s practice areas, with a primary focus on securities litigation and institutional investor relations. She directs the Firm s Portfolio Monitoring Services and assists clients in identifying material losses in their securities portfolios caused by corporate wrongdoing. She consults with investors regarding securities litigation, corporate governance, and shareholder rights. She has been involved in numerous securities fraud litigations which have recovered millions of dollars for shareholders, including: In re CIT Group Sec. Litig., 1: (S.D.N.Y. 2008), $75 million Klugmann v. American Capital Ltd., 09-cv-0005 (D. Md. 2009), $18 million 15

177 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 18 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA In re Nuvelo, Inc. Sec. Litig., 07-cv-4056 (N.D. Cal. 2007), $8.9 million Bauer v. Prudential, Inc., 09-cv-1120 (JLL) (D.N.J. 2009), $16.5 million Prior to joining the Firm, Ms. Kulesa practiced at Izard Nobel, LLP, where she represented investors in securities class actions and employees under ERISA. Ms. Kulesa has experience in representing corporations seeking antitrust clearance of mergers and acquisitions and has also handled commercial litigation matters and contractual disputes. Education University of Connecticut School of Law, J.D. (2001) Fordham University, B.A., International Politics (1998) Admissions Connecticut (2001) United States District Court for the District of Connecticut (2004) United States District Court for the Southern District of New York (2015) United States Court of Appeals for the Ninth Circuit (2016) Amy Miller Amy Miller has represented clients in stockholder derivative law suits, corporate governance litigation, securities class actions, and appraisal proceedings over the last fifteen years. She currently prosecutes these cases on behalf of stockholders seeking accountability from corporate management on issues ranging from breach of fiduciary duties to corporate waste. Ms. Miller has secured significant monetary recoveries and corporate governance reforms on behalf of stockholders, including: In re Jefferies Group, Inc. Shareholders Litig., C.A. No CB (Del. Ch. 2015) ($70 million recovery) In re News Corp. S holder Deriv. Litig., C.A. No VCN (Del. Ch. 2013) ($139 million recovery and a variety of corporate governance enhancements) In re ACS S holder Litig., C.A. No VCP (Del. Ch. 2010) ($69 million recovery) Prior to joining the Firm, Ms. Miller practiced at Cadwalader, Wickersham & Taft LLP for more than seven years before working at two boutique plaintiffs firms in New York. While in law school, Ms. Miller participated in an externship with the Honorable George B. Daniels of the United States District Court for the Southern District of New York. Education New York Law School, J.D., summa cum laude, where she served as a Member & Articles Editor on the New York Law School Law Review, and was awarded Merit Based Scholarships from 1997 through 2001 (2001) Boston University, B.A., magna cum laude (1995) Admissions New York (2002) United States District Court for the Southern District of New York 16

178 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 19 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA United States District Court for the Eastern District of New York United States Court of Appeals for the Sixth Circuit Publications Co-Author of Coaches Should Stick to the Sidelines: Why the Federal Rules Should Track Delaware Rules Regarding Conferences Between Deponents and Counsel, used in conjunction with Practising Law Institute s Corporate Law and Practice Course Handbook Series Nicholas I. Porritt Nicholas I. Porritt prosecutes securities class actions, shareholder class actions, derivative actions, and mergers and acquisitions litigation. He has extensive experience representing plaintiffs and defendants in a wide variety of complex commercial litigation, including civil fraud, breach of contract, and professional malpractice, as well as defending SEC investigations and enforcement actions. Mr. Porritt has helped recover hundreds of millions of dollars on behalf of shareholders. He was one of the Lead Counsel in In re Google Inc. Class C Shareholder Litigation, C.A. No CS (Del. Ch. 2012) that resulted in a payment of $522 million to shareholders and overall benefit of over $3 billion to Google s minority shareholders. He was one of the lead counsel in Chen v. Howard-Anderson, No VCL (Del. Ch. Jan. 24, 2011) that settled during trial resulting in a $35 million payment to the former shareholders of Occam Networks, Inc., one of the largest quasi-appraisal recoveries for shareholders. Some of Mr. Porritt s cases include: Zaghian v. Farrell, 675 Fed. Appx. 718, (9th Cir. 2017) SEC v. Cuban, 620 F.3d 551 (5th Cir. 2010) Cozzarelli v. Inspire Pharmaceuticals, Inc., 549 F.3d 618 (4th Cir. 2008) Teachers Retirement System of Louisiana v. Hunter, 477 F.3d 162 (4th Cir. 2007) In re PTC Therapeutics Sec. Litig., 2017 WL (D.N.J. Aug. 28, 2017) Gormley v. magicjack VocalTec Ltd., 220 F. Supp. 3d 510 (S.D.N.Y. 2016) Carlton v. Cannon, 184 F. Supp. 3d 428 (S.D. Tex. 2016) Zola v. TD Ameritrade, Inc., 172 F. Supp. 3d 1055 (D. Neb. 2016) In re Energy Recovery Sec. Litig., 2016 WL (N.D. Cal. Jan. 27, 2016) In re EZCorp Inc. Consulting Agreement Deriv. Litig., 2016 WL (Del. Ch. Jan. 25, 2016) In re Violin Memory Sec. Litig., 2014 WL (N.D. Cal. Oct. 31, 2014) Garnitschnig v. Horovitz, 48 F. Supp. 3d 820 (D. Md. 2014) Mr. Porritt speaks frequently on current topics relating to securities laws and derivative actions, including presentations on behalf of the Council for Institutional Investors, Nasdaq, and the Practising Law Institute. He currently serves as co-chair of the American Bar Association Sub-Committee on Derivative Actions. Before joining the Firm, Mr. Porritt practiced as a partner at Akin Gump Strauss Hauer & Feld LLP and prior to that was a partner at Wilson Sonsini Goodrich & Rosati PC. Education University of Chicago Law School, J.D., With Honors (1996) University of Chicago Law School, LL.M. (1993) Victoria University of Wellington, LL.B. (Hons.), With First Class Honors, Senior Scholarship (1990) 17

179 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 20 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Admissions New York (1997) District of Columbia (1998) United States District Court for the District of Columbia (1999) United States District Court for the Southern District of New York (2004) United States Court of Appeals for the Fourth Circuit (2004) United States Court of Appeals for the District of Columbia Circuit (2006) United States Supreme Court (2006) United States District Court for the District of Maryland (2007) United States District Court for the Eastern District of New York (2012) United States Court of Appeals for the Second Circuit (2014) United States Court of Appeals for the Ninth Circuit (2015) United States District Court for the District of Colorado (2015) United States Court of Appeals for the Tenth Circuit (2016) United States Court of Appeals for the Eleventh Circuit (2017) Publications Current Trends in Securities Litigation: How Companies and Counsel Should Respond, Inside the Minds Recent Developments in Securities Law (Aspatore Press 2010) Rosemary M. Rivas Rosemary M. Rivas is a partner in Levi & Korsinsky s San Francisco office. She has dedicated her legal career to representing consumers in complex, class action litigation involving false advertising and defective product claims. Most recently, in a highly competitive application process, Judge Charles R. Breyer appointed Ms. Rivas to the Plaintiffs Steering Committee in In re: Volkswagen Clean Diesel MDL, Case No. 15-MDL-2672-CRB (JSC), which has resulted in unprecedented settlements exceeding $14 billion dollars. Ms. Rivas has served in a leadership role in a number of cases, including: Lima v. Gateway, Case No. SACV (C.D. Cal.), Co-Lead Class Counsel in nationwide class action involving defective monitor; achieved $195 refund for each monitor purchased Pappas v. Naked Juice, Case No. 2:11-cv (C.D. Cal.), Co-Lead Class Counsel; achieved $9 million settlement and changes to the company s testing procedures and product labels) Garcia v. Allergan, Inc., Case No. 09-cv-7088 PSG (Ex) (C.D. Cal.), Co-Lead Class Counsel; achieved $7.75 million settlement and changes to the company s training procedures She has also been instrumental in obtaining favorable appellate decisions on behalf of consumers in the areas of false advertising, federal preemption, and arbitration, such as: Lilly v. ConAgra Foods, Inc., 743 F.3d 662 (9th Cir. 2014) In re Sony PS3 Other OS Litig., 551 Fed. App. 916 (9th Cir. 2014) Probst v. Superior Court (Health Net of California), 2012 Cal. LEXIS 4476 (Ct. Appeal, 1st Dist., May 9, 2012) 18

180 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 21 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Ms. Rivas was a recipient of the 2018 California Lawyer of the Year (CLAY) Award. The CLAY awards are given annually to outstanding California practitioners whose extraordinary work and cases had a major impact on the law. From , Ms. Rivas was selected as a Rising Star by Law & Politics Magazine, which recognizes the best lawyers 40 years old or under or in practice for ten years or less. In 2015, Bay Area Legal Aid presented her with the Guardian of Justice award, for her work achievements in the law and her role in helping direct cy pres funds to ensure equal access to the civil justice system. Ms. Rivas has presented at a number of speaking engagements, including: Section 17200: The Fertility of Man s Invention, 2016 (The Bar Association of San Francisco); Data Privacy Law 101: U.S. Data Privacy and Security Laws 2015 (The Bar Association of San Francisco); Food Labeling and False Advertising Class Actions, 2015 (The Bar Association of San Francisco); and Class Actions: New Developments & Approaches for Strategic Response, 2013 (American Bar Association). Previously, Ms. Rivas served as a Board Member and Diversity Director of the Barristers Club of the San Francisco Bar Association. Ms. Rivas is fluent in Spanish. Education University of California, Hastings College of Law, J.D. (2000) San Francisco State University, B.A., Political Science (1997) Admissions United States Court of Appeals for the Ninth Circuit (2001) United States District Court for the Northern District of California (2001) United States District Court for the Central District of California (2002) United States District Court for the Eastern District of California (2005) United States District Court for the Southern District of California (2005) Then Vice Chancellor Leo E. Strine, Jr. praised the Firms exceedingly measured and logical argument Forgo v. Health Grades, Inc., C.A. No VCS (Del. Ch. Sept. 3, 2010) Elizabeth K. Tripodi Elizabeth K. Tripodi focuses her practice on shareholder M&A litigation, representing shareholders of public companies impacted by mergers, acquisitions, tender offers, and other change-in-control transactions. Ms. Tripodi has been named as a Washington, DC Super Lawyer and was selected as a Rising Star by Thomson Reuters for several consecutive years. Ms. Tripodi has played a lead role in obtaining monetary recoveries for shareholders in M&A litigation: In re Bluegreen Corp. S holder Litig., Case No CA (Circuit Ct. for Palm Beach Cty., FL), creation of a $36.5 million common fund settlement in the wake of a majority shareholder buyout, representing a 25% increase in total consideration to the minority stockholders 19

181 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 22 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA In re Cybex International S holder Litig, Index No /2012 (N.Y. Sup. Ct. 2014), recovery of $1.8 million common fund, which represented an 8% increase in stockholder consideration in connection with management-led cash-out merger In re Great Wolf Resorts, Inc. S holder Litig, C.A. No VCN (Del. Ch. 2012), where there was a $93 million (57%) increase in merger consideration Minerva Group, LP v. Keane, Index No /2013 (N.Y. Sup. Ct. 2013), settlement in which Defendants increased the price of an insider buyout from $8.40 to $9.25 per share Ms. Tripodi has played a key role in obtaining injunctive relief while representing shareholders in connection with M&A litigation, including obtaining preliminary injunctions or other injunctive relief in the following actions: In re Portec Rail Products, Inc. S holder Litig, G.D (Ct. Com. Pleas Pa. 2010) In re Craftmade International, Inc. S holder Litig, C.A. No VCL (Del. Ch. 2011) Dias v. Purches, C.A. No VCG (Del. Ch. 2012) In re Complete Genomics, Inc. S holder Litig, C.A. No VCL (Del. Ch. 2012) In re Integrated Silicon Solution, Inc. Stockholder Litig., Lead Case No. 115CV (Sup. Ct. Santa Clara, CA 2015) Prior to joining Levi & Korsinsky, Ms. Tripodi was a member of the litigation team that served as Lead Counsel in, and was responsible for, the successful prosecution of numerous class actions, including: Rudolph v. UTStarcom (stock option backdating litigation obtaining a $9.5 million settlement); Grecian v. Meade Instruments (stock option backdating litigation obtaining a $3.5 million settlement). Education American University Washington College of Law, cum laude (2006), where she served as Editor in Chief of the Business Law Brief, was a member of the National Environmental Moot Court team, and interned for Environmental Enforcement Section at the Department of Justice Davidson College, B.A., Art History (2000) Admissions Virginia (2006) District of Columbia (2008) United States District Court for the Eastern District of Virginia (2006) United States District Court for the District of Columbia (2010) Associates Stephanie A. Bartone Stephanie A. Bartone practices in all areas of the firm, with a focus on consumer class action litigation. Prior to joining the firm, Ms. Bartone worked for the Connecticut Judicial System where she assisted State court judges in civil and family matters. Ms. Bartone also previously worked for a firm specializing in civil litigation and criminal defense at the state and federal level. Education 20

182 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 23 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA The University of Connecticut School of Law, J.D. (2012), where she served as Symposium Editor of the Connecticut Law Review University of New Hampshire, B.A., Psychology and Justice Studies, summa cum laude (2008) Admissions Connecticut (2012) Massachusetts (2012) United States District Court for the District of Colorado (2013) United States District Court for the District of Connecticut (2015) United States District Court for the District of Massachusetts (2016) Jordan A. Cafritz Jordan Cafritz is an Associate with the Firm's Washington, D.C. office. While attending law school at American University he was an active member of the American University Business Law Review and worked as a Rule 16 attorney in the Criminal Justice Defense Clinic. After graduating from law school, Mr. Cafritz clerked for the Honorable Paul W. Grimm in the U.S. District Court for the District of Maryland. Education American University Washington College of Law, J.D. (2014) University of Wisconsin-Madison, B.A., Economics & History (2010) Admissions Maryland (2014) Admission to DC Bar pending practice in the District of Columbia authorized only under Rule 49(c)(3) Cecille B. Cargill Cecille B. Cargill manages the Firm s client development services. She advises shareholders of their rights related to securities litigation, complex class actions, and shareholder and derivative litigation, and also responds to shareholder inquiries pertaining to the Firm and specific cases. Education Boston University School of Law, J.D. (1994) State University at Buffalo, B.A., History & Legal Studies (1990) Admissions Massachusetts (1995) 21

183 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 24 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA John A. Carriel John A. Carriel is an Associate with the Firm in the Washington, D.C. office, where he focuses his practice on financial litigation, including class action litigation relating to corporate governance, securities, cryptocurrencies, and initial coin offerings. During law school, he interned for the Enforcement and Investment Management Divisions of the Securities and Exchange Commission and the Legal Division of the Consumer Financial Protection Bureau. In addition, he worked as a summer associate for a midsize business law firm in New York. Education The George Washington University Law School, J.D., With Honors (2017) Universidad Pontificia Comillas (ICADE), LL.M., International and European Business Law, With Honors (2015) Drew University, B.A., Business Studies (2013) Admissions District of Columbia (2017) United States District Court for the District of Colorado (2018) Publications M-U-N-I: Evidencing the Inadequacies of the Municipal Securities Regulatory Framework, 1 BUS. ENTREPRENEURSHIP & TAX L. REV. 528 (2017). Andrea Clisura Andrea Clisura focuses her practice on prosecuting consumer class actions. Prior to joining Levi & Korsinsky, she was an associate at a boutique law firm in New York specializing in class action litigation. While attending Brooklyn Law School, Ms. Clisura served as an Associate Managing Editor of the Journal of Law and Policy and was a member of the Moot Court Honor Society, Appellate Advocacy Division. Her note, None of Their Business: The Need for Another Alternative to New York s Bail Bond Business, was published in Brooklyn Law School s Journal of Law and Policy. Ms. Clisura also gained experience in law school as an intern to the Honorable David G. Trager of the U.S. District Court for the Eastern District of New York and as a summer law intern with the U.S. Department of Justice, Antitrust Division, and a New York Legal Services office engaged in foreclosure defense. Education Brooklyn Law School, J.D., magna cum laude (2011) New York University, B.A., magna cum laude (2005) Admissions New Jersey (2011) New York (2012) United States District Court for the District of New Jersey (2012) United States District Court for the Eastern District of New York (2012) 22

184 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 25 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA United States District Court for the Southern District of New York (2012) William J. Fields William J. Fields is a member of the New York City Bar Association and serves on the New York City Affairs Committee. Before joining the Firm, Mr. Fields was a Law Clerk in the Second Circuit Court of Appeals Staff Attorney s Office. Education Cornell Law School, J.D. (2011) University of Connecticut, B.A., cum laude (2008) Admissions New York (2012) United States District Court for the Eastern District of Michigan (2016) Vice Chancellor Sam Glasscock, III said it s always a pleasure to have counsel who are articulate and exuberant and referred to our approach to merger litigation as wholesome and a model of plaintiffs litigation in the merger arena. Ocieczanek v. Thomas Properties Group, C.A. No VCG (Del. Ch. May 15, 2014) James Grohsgal James Grohsgal is an Associate in the Connecticut office. He represents shareholders in federal securities fraud litigation and has nearly a decade of experience representing clients in securities fraud and shareholder derivative cases. Prior to joining the firm, Mr. Grohsgal was an associate at the New York offices of Skadden, Arps, Slate, Meagher & Flom LLP and then at Orrick, Herrington, & Sutcliffe LLP, where he represented publicly traded companies, investment banks, mortgage loan originators, and financial services firms in federal and state securities litigation, shareholder derivative suits, and SEC enforcement matters. He also represented Fortune 500 companies and sovereign states in commercial, investment, and intellectual property litigation and international arbitration. Education McGill University Faculty of Law, LL.B. and B.C.L., great distinction, where he served as Case Comments Editor on the McGill Law Journal (2008) McGill University, B.A., Political Science, Honors (2004) Admissions New York (2009) United States District Court for the Southern District of New York (2010) 23

185 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 26 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA United States District Court for the Eastern District of New York (2010) United States Court of Appeals for the District of Columbia (2016) Not admitted to practice in Connecticut; practice limited to federal law Michelle Gruesbeck Michelle Gruesbeck practices in the Washington, D.C. office, focusing on securities class actions and stockholder derivative suits. While attending law school, Ms. Gruesbeck gained experience as an intern at the Securities and Exchange Commission in the Office of Compliance Inspections Examinations, the Division of Enforcement, the Division of International Corporation Finance, and the Division of Corporation Finance (AD 5). She also served as an editor of the Journal of Land and Development and was a member of the Stetson International Environmental Moot Court Team. Education Georgetown University Law Center, LL.M., Securities and Financial Regulation (2015) University of Baltimore School of Law, J.D., cum laude (2013) Purdue University, B.A., Biology (2003) Admissions Maryland (2013) United States District Court for the District of Colorado (2018) Alexander Krot Education The George Washington University, B.B.A., Finance and International Business (2003) American University Washington College of Law, J.D. (2010) Georgetown University Law Center, LL.M., Securities and Financial Regulation, With Distinction (2011) American University, Kogod School of Business, M.B.A. (2012) Admissions Maryland (2011) District of Columbia (2014) United States District Court for the District of Colorado (2015) United States Court of Appeals for the Tenth Circuit (2016) United States District Court for the Eastern District of Wisconsin (2017) Christopher J. Kupka Christopher J. Kupka represents victims of wrongdoing in employment, consumer, and securities class actions and stockholder derivative suits. In law school, Mr. Kupka was awarded the M.H. Goldstein 24

186 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 27 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Memorial Prize for excellence in labor law. Mr. Kupka was also the recipient of an Edward V. Sparer Public Interest Fellowship. Education University of Pennsylvania Law School, J.D. (2010), where he served as an editor of the Journal of International Law Cornell University, A.B. (2007) Admissions New York (2011) United States District Courts for the Southern District of New York (2012) United States District Courts for the Eastern District of New York (2012) Illinois (2013) United States District Courts for the Northern District of Illinois (2014) Publications Remediation of Unfair Labor Practices and the EFCA: Justifications, Criticisms, and Alternatives, 38 Rutgers L. Rec. 197 (May 2011) Co-author of Turning Tides For Employee Arbitration Agreements as featured on Law360.com (October 2016) Jonathan Lindenfeld Jonathan Lindenfeld is an Associate with the Firm in the New York office. Mr. Lindenfeld s practice focuses on securities class actions and stockholder derivative suits. While attending law school, Mr. Lindenfeld gained experience as an intern at the U.S. Attorney s Office in the Eastern District of New York and a boutique law firm specializing in derivatives and forex exchanges. Mr. Lindenfeld also served as an editor of the Hofstra Journal of International Business and Law. Education Hofstra University School of Law, J.D., cum laude, where he received Honors in Business Law, and was awarded Merit Based Scholarships from 2012 through 2015 (2015) City University of New York-Queens College, B.A., Economics (2012) Admissions New Jersey (2015) New York (2016) United States District Court for the Southern District of New York (2016) Publications The CFTC s Substituted Compliance Approach: An Attempt to Bring About Global Harmony and Stability in the Derivatives Market, 14 J. INT L BUS. & L. 125 (2015) 25

187 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 28 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Courtney E. Maccarone Courtney E. Maccarone focuses her practice on prosecuting consumer class actions. Prior to joining Levi & Korsinsky, Ms. Maccarone was an associate at a boutique firm in New York specializing in class action litigation. While attending Brooklyn Law School, Ms. Maccarone served as the Executive Symposium Editor of the Brooklyn Journal of International Law and was a member of the Moot Court Honor Society. Her note, Crossing Borders: A TRIPS-Like Treaty on Quarantines and Human Rights was published in the Spring 2011 edition of the Brooklyn Journal of International Law. Ms. Maccarone also gained experience in law school as an intern to the Honorable Martin Glenn of the Southern District of New York Bankruptcy Court and as a law clerk at a New York City-based class action firm. Ms. Maccarone was selected as a New York Super Lawyers Rising Star in 2014, 2015, 2016 and Education Brooklyn Law School, J.D., magna cum laude (2011), where she served as the Executive Symposium Editor of the Brooklyn Journal of International Law and was a member of the Moot Court Honor Society New York University, B.A., magna cum laude (2008) Admissions New Jersey (2011) New York (2012) United States District Court for the District of New Jersey (2012) United States District Court for the Eastern District of New York (2012) United States District Court for the Southern District of New York (2012) Publications Crossing Borders: A TRIPS-Like Treaty on Quarantines and Human Rights, published in the Spring 2011 edition of the Brooklyn Journal of International Law Adam C. McCall Adam C. McCall is an Associate with the Firm. Prior to joining Levi & Korsinsky, Mr. McCall was a Summer Analyst at Moelis & Company and an intern at Fortress Investment Group. While attending the Georgetown University Law Center, he was an extern at the Securities and Exchange Commission s Division of Corporate Finance. Education Georgetown University Law Center, LL.M., Securities and Financial Regulation (2015) California Western School of Law, J.D., cum laude (2013) Santa Clara University, Certificate of Advanced Accounting Proficiency (2010) University of Southern California, B.A., Economics (2008) Admissions California (2014) 26

188 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 29 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA United States District Court for the Central District of California (2015) United States District Court for the Eastern District of California (2015) United States District Court for the Northern District of California (2015) United States District Court for the Southern District of California (2015) United States Court of Appeals for the Ninth Circuit (2016) District of Columbia (2017) Gregory M. Potrepka Gregory M. Potrepka is an Associate in Levi & Korsinsky s Connecticut office. Mr. Potrepka is an experienced lawyer having litigated cases in State, Federal, and Tribal courts, at both the trial and appellate levels. While in law school, Mr. Potrepka clerked in the Civil Division of the United States Attorney's Office for the District of Columbia. Education University of Connecticut School of Law, J.D. (2015) University of Connecticut Department of Public Policy, M.P.A. (2015) University of Connecticut, B.A., Political Science (2010) Admissions Connecticut (2015) Mashantucket Pequot Tribal Court (2015) United States District Court for the District of Connecticut (2016) Quentin A. Roberts Quentin A. Roberts is an Associate in Levi & Korsinsky s San Francisco office. While attending law school, Mr. Roberts was a member of the Law Review and worked on class action litigation as a law clerk. Mr. Roberts concentrates on litigating class action matters, particularly those involving consumer fraud. He has worked on a number of high-profile cases, such as In re: Volkswagen Clean Diesel Marketing, Sales Practices, & Prods. Liab. Litig., No. 15-md-2672 (N.D. Cal.), pending in the Northern District of California. Education University of San Francisco School of Law, J.D., magna cum laude (2015) University of California, San Diego, B.A., Economics (2010) Admissions California (2015) United States District Court for the Northern District of California (2016) United States District Court for the Central District of California (2017) 27

189 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 30 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Andrew Rocco Andrew Rocco is an Associate with the Firm in the Connecticut office. As a law student, he interned for the Office of the Attorney General for the State of Connecticut in the Employment Rights Department, and served as the Editor-in-Chief of the Quinnipiac Probate Law Journal. Education Quinnipiac University School of Law, J.D., summa cum laude (2017) Champlain College, B.A., Legal Studies, summa cum laude (2014) Admissions Connecticut Samir Shukurov Mr. Shukurov is an associate in Levi & Korsinsky s New York office and represents shareholders in complex corporate litigation, corporate governance and securities matters in state and federal courts nationwide. Mr. Shukurov also has corporate experience representing clients in various exempted securities offerings and 1934 Securities Exchange Act reporting matters. Previously, Mr. Shukurov worked in the General Counsel s office of Ernst & Young in his home country of Azerbaijan. Education Boston University School of Law, LL.M., Outstanding Achievement Award (2015) Baku State University, LL.M., Civil Law, With Honors (2012) Baku State University, LL.B. (2009) Admissions Massachusetts (2015) New York (2016) United States District Court for the Southern District of New York (2016) Brian Stewart Brian Stewart is an Associate with the Firm practicing in the Washington, D.C. office. Prior to joining the firm, Mr. Stewart was an associate at a small litigation firm in Washington D.C. and a regulatory analyst at the Financial Industry Regulatory Authority (FINRA). During law school, he interned for the Enforcement Divisions of the SEC and CFPB. Education American University Washington College of Law, J.D. (2012) University of Washington, B.S., Economics and Mathematics (2008) Admissions Maryland (2012) District of Columbia (2014) 28

190 Case 1:15-cv LLS Document 86-3 Filed 06/29/18 Page 31 of 31 LEVI&KORSINSKY LLP NEW YORK I WASHINGTON, D.C. I CONNECTICUT I CALIFORNIA Sebastian Tornatore Sebastian Tornatore is an Associate in the Connecticut office where he focuses on representing shareholders in federal securities actions. While at the University of Connecticut School of Law, Mr. Tornatore served as an Executive Editor of the Connecticut Law Review and as a member of the Connecticut Moot Court Board. Prior to joining the Firm, Mr. Tornatore worked for the Connecticut Judicial System, where he gained significant experience assisting various state judges. Education The University of Connecticut School of Law, J.D. (2012) Boston College, B.A., Political Science (2008) Admissions Massachusetts (2012) Connecticut (2012) New York (2014) United States District Court for the District of Connecticut (2014) United States District Court for the Southern District of New York (2016) United States District Court for the District of Massachusetts (2016) Staff Attorneys Silpa Rao Silpa Rao works as a Staff Attorney in the Connecticut office. Prior to joining the firm, Ms. Rao worked with the Connecticut Judicial Branch in Danbury, where she assisted state court judges in civil jury trials and other courtroom matters on the civil and family docket. While at the University of Connecticut School of Law, Ms. Rao served as a Competition Editor for the Connecticut Public Interest Law Journal and President of the South Asian Law Students Association. She also completed an Honors Law Clerk externship with the Environmental Protection Agency while studying for a semester in Washington, D.C. Education University of Connecticut School of Law, J.D., Certificate in Environmental Law (2013) New York University, B.A., Environmental Studies (2009) Admissions Massachusetts (2014) New York (2017) 29

191 Case 1:15-cv LLS Document 87 Filed 06/29/18 Page 1 of 5 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Case No. 1:15-cv LLS CLASS ACTION DECLARATION OF ALEXANDER VILLANOVA Defendants. I, Alexander Villanova, declare and state as follows: 1. I am a Project Manager employed by Epiq Systems, Inc. ( Epiq ). The following statements are based on my personal knowledge and information provided by other Epiq employees working under my supervision, and if called on to do so, I could and would testify competently thereto. 2. Epiq was retained by Lead Plaintiff s Counsel in the above-captioned action (the Action ), and appointed pursuant to paragraph 5 of the Court s Order Granting Preliminary Approval of Settlement dated April 3, 2018 ( Preliminary Approval Order ), to serve as the Claims Administrator. I submit this Declaration in order to provide the Court and the parties to the Action with information regarding the mailing of the Court-approved Notice of Pendency and Proposed Settlement of Class Action (the Notice ) and the Proof of Claim and Release ( Proof of Claim ), (together, the Notice and Proof of Claim are referred to herein as the Notice Packet ), as well as the publication of the Summary Notice, and establishment of the website and toll-free number dedicated to this Settlement, in accordance with the Court s Preliminary Approval Order.

192 Case 1:15-cv LLS Document 87 Filed 06/29/18 Page 2 of 5 DISSEMINATION OF THE NOTICE PACKET 3. Epiq is responsible for disseminating the Notice Packet to potential Class Members. By definition, Class Members are all persons or entities who, during the period between October 31, 2012 and August 5, 2015, (the Class Period ), purchased or otherwise acquired Resource Capital common stock, Series B preferred stock and/or Series C preferred stock, and who were allegedly damaged thereby. Excluded from the Class are Defendants, directors or officers of Resource Capital during the Class Period, members of the immediate family of, or of a trust, company, entity, or affiliate controlled or owned by, any excluded party during the Class Period, legal representatives, agents, executors, heirs, successors, or assigns of any excluded party, or those who sold but did not purchase Resource Capital securities during the Class Period. Also excluded from the Class are those persons or entities who timely and validly file a request for exclusion. 4. As the large majority of potential Class Members are beneficial purchasers whose securities are held in street name i.e., the securities are purchased by brokerage firms, banks, institutions and other third-party nominees in the name of the nominee, on behalf of the beneficial purchasers, the Notice requested that those who purchased or otherwise acquired Resource Capital common stock, Series B preferred stock, and/or Series C preferred stock, for the beneficial interest of a person or organization other than themselves to either (i) send a copy of the Notice Packet to the beneficial owner of such securities, postmarked no later than 10 days after such nominees receipt of the Notice Packet, or (ii) provide to Epiq the names and addresses of such persons no later than 10 days after such nominees receipt of the Notice Packet. 5. Epiq maintains and updates an internal list of the largest and most common banks, brokers and other nominees. The Notice Packet, along with a Nominee Cover Letter requesting that its recipients forward the Notice Packet to beneficial owners or provide Epiq with mailing information for such beneficial owners, was mailed to Epiq s internal broker list containing 1,374 additional names and addresses on April 17, 2018 (the Notice Date ). A copy of the Notice 2 DECL. OF ALEXANDER VILLANOVA Case No. 1:15-cv LLS

193 Case 1:15-cv LLS Document 87 Filed 06/29/18 Page 3 of 5 Packet is attached hereto as Exhibit A. A copy of the Nominee Cover Letter is attached hereto as Exhibit B. 6. In accordance with the instructions in the Notice, Epiq has received requests from nominees for additional Notice Packets to be mailed directly to potential Class Members identified by the nominees. Nominees have also requested additional copies of the Notice Packet for them to forward onto potential Class Members. Since the Notice Date, Epiq received requests from nominees for 50,646 Notice Packets. Each of the requests for Notice Packets has been and will continue to be completed in a timely manner. 7. As of June 26, 2018, an aggregate of 52,185 Notice Packets have been disseminated to potential Class Members and nominees by first-class mail. PUBLICATION OF THE SUMMARY NOTICE 8. The Court s Preliminary Approval Order also directed that the Summary Notice be published once in the national edition of PR Newswire no later than April 17, Accordingly, the Summary Notice was published in the national edition of PR Newswire on April 17, Attached as Exhibit C is a confirmation of publication, which includes a copy of the publication in PR Newswire. CALL CENTER SERVICES 9. Epiq reserved a toll-free phone number for the Settlement, (844) , which it continues to maintain. This toll-free number was set forth in the Notice Packet and on the Settlement website. 10. The toll-free number connects callers with an Interactive Voice Recording (the IVR ). The IVR provides potential Class Members and others who call the toll-free telephone number with pre-recorded information, including a brief summary about the Settlement, the option to select one of several more detailed recorded messages addressing frequently asked questions, the option to request a copy of the Notice Packet, or the option to speak live with a trained phone 3 DECL. OF ALEXANDER VILLANOVA Case No. 1:15-cv LLS

194 Case 1:15-cv LLS Document 87 Filed 06/29/18 Page 4 of 5 agent. The toll-free telephone line with pre-recorded information is available 24 hours a day, 7 days a week. 11. Epiq made the IVR available on April 16, 2018, the day before Epiq published the Summary Notice. 12. Monday through Friday from 6:00 a.m. to 6:00 p.m. Pacific Standard Time (excluding official holidays), callers are able to speak to a live phone agent regarding the status of the Settlement, to obtain help filling out and filing their Proof of Claim, and/or obtain answers to questions they may have about communications they receive from Epiq. During other hours, callers may leave a message for an agent to call them back. 13. Epiq will continue operating, maintaining and, as appropriate, updating the IVR until the conclusion of this settlement administration. Epiq will continue providing live phone agent support until the conclusion of the settlement administration. 14. As of June 26, 2018 Epiq has received or placed a total of 386 calls, for a total of 3,916 minutes, to the toll-free number set up for this Settlement. WEBSITE 15. Epiq established and is maintaining a website dedicated to this Settlement ( to provide additional information to Class Members and to answer frequently asked questions. Users of the website can download a copy of the Notice, Proof of Claim, and the Stipulation and Agreement of Settlement. The web address was set forth in the Notice Packet. The Settlement website was operational beginning on April 16, 2018, and is accessible 24 hours a day, 7 days a week. EXCLUSION REQUESTS 16. Pursuant to this Court s Preliminarily Approval Order, Class Members who wish to be excluded from the Class are required to do so in writing so that the request is postmarked by July 5, As of June 26, 2018, Epiq has received no exclusion requests. Epiq will submit a 4 DECL. OF ALEXANDER VILLANOVA Case No. 1:15-cv LLS

195 Case 1:15-cv LLS Document 87 Filed 06/29/18 Page 5 of 5

196 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 1 of 19 Exhibit A

197 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 2 of 19 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, individually and on behalf of all others similarly situated, Plaintiff, Case No. 1:15-cv LLS Hon. Louis L. Stanton v. RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Defendants. NOTICE OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION T8041 v

198 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 3 of 19 TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR OTHERWISE ACQUIRED RESOURCE CAPITAL CORP. ( RESOURCE CAPITAL ) SECURITIES BETWEEN OCTOBER 31, 2012 AND AUGUST 5, PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS ACTION. PLEASE NOTE THAT, IF YOU ARE A CLASS MEMBER, YOU MAY BE ENTITLED TO SHARE IN THE PROCEEDS OF THE SETTLEMENT DESCRIBED IN THIS NOTICE. TO CLAIM YOUR SHARE OF THE PROCEEDS OF THE SETTLEMENTS, YOU MUST SUBMIT A VALID PROOF OF CLAIM AND RELEASE FORM ( PROOF OF CLAIM ) POSTMARKED NO LATER THAN JULY 23, A federal court authorized this Notice. This is not a solicitation from a lawyer. Securities and Time Period: Resource Capital Corp. ( Resource Capital ) common stock, Series B preferred stock, and Series C preferred stock purchased/acquired between October 31, 2012 and August 5, Settlement Fund: Settlement funds of $9,500,000 total in cash have been established pursuant to the Settlement. 1 Your recovery will depend on the amount of securities acquired and the timing of your acquisition. Depending on the number of eligible securities that participate in the settlement and when those securities were purchased, Lead Plaintiff estimates the average cash recovery per share of common stock, Series B preferred stock, and Series C preferred stock will be approximately $0.09, $0.24, and $0.24, respectively (assuming claims representing all damaged shares are filed) before deduction of court-approved fees and expenses. Reasons for Settlement: The principal reason for the settlement is the benefit to be provided to the Class now. This benefit must be compared to the costs and risks associated with continued litigation, including the danger of no recovery for Class Members after a contested trial and likely appeals, possibly years into the future. If the Class Action Had Not Settled: Continuing with the case could have resulted in dismissal or loss at trial. The parties disagree about both liability and damages and do not agree on the average amount of damages that would be recoverable even assuming the Class prevailed on each claim alleged. The Defendants deny that they are liable to the Class and deny that the Class has suffered any damages. Among the issues about which the two sides disagree are: (1) whether, and the extent to which, various statements and/or omissions alleged by Lead Plaintiff were materially false or misleading or actionable under the securities laws; (2) whether any of the Defendants intended to mislead investors, (3) whether, and the extent to which, various statements and/or omissions alleged by Lead Plaintiff influenced the trading price of Resource Capital securities during the relevant period; (4) whether Resource Capital securities were artificially inflated during the relevant period; (5) the method for determining whether and to what extent Resource Capital securities were artificially inflated during the relevant period; and (5) the amount of such inflation, if any. Attorneys Fees and Expenses: Lead Counsel has not received any payment for their work investigating the facts, conducting this litigation, or negotiating the settlement on behalf of Lead Plaintiff and the Class. Court-appointed Lead Counsel will ask the Court for an award of attorneys fees not to exceed 33% ($3,166,667) from the Settlement Fund and reimbursement of out-of-pocket litigation expenses not to exceed $200,000 to be paid from the Settlement Fund. If the above amounts are requested and approved by the Court, the average cost per share of common stock, Series B preferred stock, and Series C preferred stock will be approximately $0.03, $0.08, and $0.08, respectively. If approved, Lead Plaintiff estimates the average cash recovery per share of common stock, Series B preferred stock, and Series C preferred stock will be approximately $0.05, $0.15, and $0.15, respectively (assuming claims representing all damaged shares are filed). Deadlines: Submit Claim: July 23, 2018 Request Exclusion: July 5, 2018 File Objection: July 13, 2018 Court Hearing on Fairness of Settlement: August 3, This Notice incorporates by reference the definitions in the Stipulation and Agreement of Settlement, dated February 5, 2018 (the Settlement or Stipulation ), and all capitalized terms used but not defined herein shall have the same meanings as in the Settlement. A copy of the Settlement can be obtained at T8042 v

199 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 4 of 19 More Information: or Claims Administrator: Resource Capital Corp. Securities Litigation Claims Administrator P.O. Box 4850 Portland, OR Lead Counsel: Nicholas I. Porritt, Esq. Levi & Korsinsky LLP th Street NW, Suite 115 Washington, DC nporritt@zlk.com YOUR LEGAL RIGHTS AND OPTIONS IN THIS CLASS ACTION SETTLEMENT: SUBMIT A CLAIM FORM EXCLUDE YOURSELF OBJECT GO TO A HEARING DO NOTHING The only way to get a payment Get no payment. This is the only option that allows you to participate in another lawsuit against the Defendants relating to the legal claims in this case. You may write to the Court if you do not like this Settlement. You may ask to speak in Court about the fairness of the settlement. Get no payment These rights and options and the deadlines to exercise them are explained in this Notice. The Court in charge of this case must decide whether to approve the settlement. Payments will be made if the Court approves the settlement and, if there are any appeals, after appeals are resolved. Please be patient. 1. Why Did I Get This Notice Package? BASIC INFORMATION You or someone in your family may have purchased or acquired the publicly traded securities of Resource Capital listed above between October 31, 2012 and August 5, The Court ordered that this Notice be sent to you because you have a right to know about a proposed settlement of a class action lawsuit, and about all of your options before the Court decides whether to approve the settlement. If the Court approves it and after any objections or appeals are resolved, the Claims Administrator appointed by the Court will make the payments that the settlement allows. This package explains the lawsuit, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them. The Court in charge of the case is the United States District Court for the Southern District of New York, and the case is known as Levin v. Resource Capital Corp., et al., 1:15-CV (S.D.N.Y.). The person who sued is called the Lead Plaintiff, and the companies and the individuals they sued, Resource Capital as well as Jonathan Z. Cohen, David J. Bryant, Eldron C. Blackwell, and David E. Bloom, are called Defendants. Defendants have agreed to settle the claims made in this case. 2. What Is This Lawsuit About? Lead Plaintiff filed this lawsuit alleging that Resource Capital and certain of its former and current executive officers violated the federal securities laws by making false and misleading statements and/or omitting statements of material fact regarding Resource Capital s business, including statements relating to a Mezzanine Loan that was fully impaired by the company in The Complaint alleges, among other things, that it was misleading for the Defendants to describe the Mezzanine Loan as performing and current and that the Defendants misled investors by allegedly failing to disclose that a substantial portion of the Mezzanine Loan was secured by collateral located within Puerto Rico. The Defendants filed a motion to dismiss the Action, which the Court denied on October 5, T8043 v

200 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 5 of 19 Defendants deny each and all of the claims and contentions of wrongdoing alleged by Lead Plaintiff in the litigation and maintain that they have, at all times, acted in good faith and in compliance with the law. They contend that they did not make any materially false or misleading statements, that they disclosed all material information required to be disclosed, and that any alleged misstatements or omissions were not made with the requisite intent or knowledge of wrongdoing. Defendants also contend that any losses suffered by members of the Class were not caused by any false or misleading statements or any other act or omission by Defendants and/or were caused by other events. Defendants have agreed to settle this action, without admitting any wrongdoing, solely to avoid the expense, distraction, and uncertainty of further litigation. 3. Why Is This a Class Action? In a class action, one or more people or entities called class representatives (in this case, Lead Plaintiff Douglas Drees and Plaintiff Allen Altman, individually and as Trustee of the Allen Altman & Catherine Altman Living Trust) sue on behalf of a group of people who have similar claims, otherwise known as members of the Class or Class Members. One court resolves the issues for all the Class Members, except for those who exclude themselves from the Class. Judge Louis L. Stanton is in charge of this class action. 4. Why Is There a Settlement? The Court did not decide in favor of the Plaintiffs or Defendants. Instead, both sides have agreed to a settlement. As a result, the parties will avoid the cost of further litigation, and eligible Class Members who make valid claims will get compensation. Plaintiffs and their attorneys (referred to here as Lead Counsel) think the settlement is the best resolution of this lawsuit for all Class Members. WHO IS IN THE SETTLEMENT To see if you will get money from this settlement, you first have to determine if you are a Class Member. 5. How Do I Know if I Am a Part of the Settlement? The Class includes all persons or entities who purchased or otherwise acquired Resource Capital common stock, Series B preferred stock, and/or Series C preferred stock between October 31, 2012 and August 5, 2015 ( Class Period ). 6. What Are the Exceptions to Being Included? You are not a Class Member if you are: A Defendant; A director or officer of Resource Capital during the Class Period; A member of the immediate family of, or of a trust, company, entity, or affiliate controlled or owned by, any excluded party during the Class Period; or A legal representative, agent, executor, heir, successor, or assign of any excluded party. If you sold but did not purchase Resource Capital securities between October 31, 2012 and August 5, 2015, you are not a member of the Class. You are a member of the Class only if you purchased or otherwise acquired your shares during the Class Period. 7. I m Still Not Sure If I Am Included in the Class Action If you are still not sure whether you are included, you can ask for free help. You can contact the Claims Administrator toll-free at , or you can fill out and return the Proof of Claim Form enclosed with this Notice package to see if you qualify. T8044 v

201 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 6 of 19 THE SETTLEMENT BENEFITS WHAT YOU GET 8. What Does the Settlement Provide? Defendants have agreed to pay or cause their insurers to pay a total of $9,500,000 in cash as part of the Settlement. The Settlement Fund will be divided among all eligible Class Members who send in valid claim forms, after payment of Court-approved attorneys fees and expenses and the costs of claims administration, including the costs of printing and mailing this Notice and the cost of publishing notice (the Net Settlement Fund ). 9. How Much Will My Payment Be? Your share of the Net Settlement Fund will depend on several things, including how many Class Members submit timely and valid Proof of Claim Forms, the total recognized losses represented by the valid Proof of Claim Forms that Class Members send in, the total number of shares of Resource Capital common stock, Series B preferred stock, and Series C preferred stock you purchased or acquired, how much you paid, and when you sold or divested. Shareholders of Resource Capital s common stock, Series B preferred stock, and Series C preferred stock lost different amounts of money in connection with their investments. In an attempt to compensate shareholders accordingly, Lead Plaintiff has divided the Net Settlement Fund into three (3) sub-funds corresponding to the overall damages sustained by each class of Resource Capital stock in the Settlement. Lead Plaintiff, with the assistance of an economic expert, estimated that damages for the common stock, Series B preferred stock, and Series C preferred stock were approximately $50 million, $3 million, and $3 million, respectively. Accordingly, 90% of the Net Settlement Fund is designated for common stock claims, 5% of the Net Settlement Fund is designated for Series B preferred stock claims, and 5% of the Net Settlement Fund is designated for Series C preferred stock claims. By following the instructions in the Plan of Allocation, you can calculate what is called your Recognized Loss. The Plan of Allocation for this Settlement is as follows: Each Class Member that submits a valid claim (an Authorized Claimant ) will be assigned a Recognized Loss. An Authorized Claimant s Recognized Loss depends upon the number of Resource Capital shares purchased during the Class Period and held at the close of trading on August 4, 2015: For common stock, an Authorized Claimant s Recognized Loss is $0.43/share. For Series B preferred stock, an Authorized Claimant s Recognized Loss is $1.65/share. For Series C preferred stock, an Authorized Claimant s Recognized Loss is $1.79/share. These amounts represent the amounts by which each security declined in price after the Class Period in response to Resource Capital s disclosures about the Mezzanine Loan. For the purposes of this Plan of Allocation, these amounts represent your losses attributable to Defendants alleged misconduct. It is unlikely that you will get a payment for all of your Recognized Loss. After all Authorized Claimants have sent in their Proof of Claim Forms, the payment you get will be a proportion of the Net Settlement Fund equal to your Recognized Loss divided by the total of each Authorized Claimant s Recognized Losses. This calculation will be done separately for each class of Resource Capital securities. Your payment will be made in cash. The Plan of Allocation also includes the following provisions: 1) There shall be no Recognized Loss attributed to any Resource Capital securities other than common stock, Series B preferred stock, and Series C preferred stock or to any Resource Capital common stock, Series B preferred stock, and Series C preferred stock purchased on a foreign exchange; 2) The date of a purchase or sale is the trade date and not the settlement date; 3) The last-in, first-out basis ( LIFO ) will be applied to both purchases and sales; 4) Exercise of option contracts or the conversion of preferred stock into common stock will be considered to be purchases or sales of common stock, Series B preferred stock, and Series C preferred stock as of the date of the exercise or conversion; T8045 v

202 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 7 of 19 5) No cash payment will be made on a claim where the potential distribution amount is less than $10. Please be advised that if you did not incur a Recognized Loss as defined in the Plan of Allocation, you will not receive a cash distribution from the Net Settlement Fund, but you will be bound by all determinations and judgments of the Court in connection with the Settlement, including being barred from asserting any of the Released Claims against the Released Parties. 6) No person shall have any claim against Lead Counsel, the Claims Administrator, or any Defendants Counsel based on the distribution made substantially in accordance with the Stipulation and this Plan of Allocation, or further orders of the Court. 7) Class Members who do not submit valid Proof of Claim Forms will not share in the settlement proceeds. Class Members who do not either submit a request for exclusion or submit a valid Proof of Claim Form will nevertheless be bound by the Settlement and the Order and Final Judgment of the Court dismissing this Action. HOW YOU GET A PAYMENT SUBMITTING A CLAIM FORM 10. How Will I Get a Payment? To qualify for payment, you must be an eligible Class Member and you must send in a Proof of Claim Form. A Proof of Claim Form is enclosed with this Notice. Read the instructions carefully, fill out the form, include all the documents the form asks for, sign it, and mail it in the enclosed envelope postmarked no later than July 23, When Will I Get My Payment? The Court will hold a hearing on August 3, 2018 to decide whether to approve the settlement. If the Court approves the class action settlement, there may be appeals. It is always uncertain whether these appeals can be resolved, and resolving them can take time, perhaps several years. Everyone who sends in a Proof of Claim Form will be informed of the determination with respect to his or her claim. Please be patient. 12. What Am I Giving Up to Get a Payment or Stay in the Class? Unless you exclude yourself, you are staying in the Class, and that means that you cannot sue, continue to sue, or be part of any other lawsuit against the Defendants or the other Released Parties about the same legal issues in this case. It also means that all of the Court s Orders will apply to you and legally bind you, and you will release your claims in this case against the Defendants and other Released Parties. The terms of the release are included in the claim form that is enclosed and are further described below. Specifically, if the Settlement is approved, the Court will enter a judgment (the Judgment ). The Judgment will dismiss with prejudice the claims in the Action and will provide that Plaintiffs and all other Class Members, on behalf of themselves, and their respective past and present directors, officers, employees, agents, trustees, fiduciaries, guardians, servants, consultants, underwriters, attorneys, advisors, representatives, estate trustees, heirs, executors, administrators, predecessors, successors and assigns, and any other person claiming by, through or on behalf of them, shall be deemed by operation of law to (a) have released, waived, discharged and dismissed each and every of the Released Claims against the Released Parties; (b) forever be enjoined from commencing, instituting or prosecuting any or all of the Released Claims against any of the Released Parties; and (c) forever be enjoined from instituting, continuing, maintaining or asserting, either directly or indirectly, whether in the United States or elsewhere, on their own behalf or on behalf of any class or any other person, any action, suit, cause of action, claim or demand against any person or entity who may claim any form of contribution or indemnity from any of the Released Parties in respect of any Released Claim. Released Claims means any and all claims, debts, demands, rights or causes of action or liabilities whatsoever (including, but not limited to, any claims for damages, interest, attorneys fees, expert or consulting fees, and any other costs, penalties, expenses or liability whatsoever, whenever or wherever incurred), whether based on federal, state, local, foreign, statutory, or common law or any other law, rule or regulation, whether fixed or contingent, accrued or unaccrued, liquidated or unliquidated, at law or in equity, matured or unmatured, whether class, individual, or otherwise in nature, whether personal or subrogated, whether suspected or unsuspected, including both known claims and Unknown Claims: (1) that have been asserted in this Action against any of the Released Parties, or (2) that have been or could have been asserted in this Action or any forum by either Plaintiff or any Class Member (or any person or and/or entity claiming by, through, or on behalf of any Plaintiff or Class Member) against any of the Released Parties which in any way, directly or indirectly, arise out of or are related to (i) the Mezzanine T8046 v

203 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 8 of 19 Loan or any statement or omission related to the Mezzanine Loan by any Released Party, (ii) any of the factual allegations of the Complaints, (iii) any misrepresentation or omission or alleged misrepresentation or omission by any Released Party before or during the Class Period related to or in connection with Resource Capital or any of its subsidiaries or the purchase or sale of Common Shares, Series B Preferred Shares or Series C Preferred Shares or any other security issued by Resource Capital, or (iv) any loss sustained or allegedly sustained as a result of the purchase, sale, or holding of Common Shares, Series B Preferred Shares, or Series C Preferred Shares, or other security issued by Resource Capital during the Class Period. Notwithstanding the foregoing, Released Claims does not include (i) claims relating to the enforcement of the Settlement or its terms, or (ii) claims asserted derivatively on behalf of Resource Capital, including (without limitation) any of the derivative claims pending in In re Resource Capital Corp. Shareholder Derivative Litigation Demand Futile Actions, No. 1:17-cv LLS (S.D.N.Y.), In re Resource Capital Corp. Shareholder Derivative Litigation Demand Refused Actions, No. 1:17-cv LLS (S.D.N.Y.), or any other pending shareholder derivative action relating to the Mezzanine Loan. Released Parties means (a) Defendants; (b) each of their respective current and former officers, directors, employees, agents, servants, representatives, parents, subsidiaries, affiliates, controlled persons, controlling persons, predecessors, assigns, assignees, counsel, members, managers, equity holders, trustees, accountants, advisors, insurers, family members and partners; (c) as to any person described in clause (b) that is not a natural person, each of their respective current and former officers, directors, employees, agents, servants, representatives, parents, subsidiaries, affiliates, controlled persons, controlling persons, predecessors, assigns, assignees, counsel, members, managers, equity holders, trustees, accountants, advisors, insurers, family members and partners; and (d) as to any of the foregoing, and each of their respective heirs, executors, administrators, legal representatives, successors and assigns. Unknown Claims means any and all Released Claims that any Plaintiff or Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Parties, and any of the Settled Defendants Claims which Defendants do not know or suspect to exist in his, her or its favor, which if known by him, her or it might have affected his, her or its decision(s) with respect to the Settlement. With respect to any and all Released Claims and Settled Defendants Claims, Plaintiffs and Defendants stipulate and agree that upon the Effective Date, Plaintiffs and Defendants shall each, for themselves and all persons claiming by, through, or on behalf of them, expressly waive, and each Class Member shall be deemed to have waived, and by operation of the Judgment shall have expressly waived, any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, that is similar, comparable, or equivalent to Cal. Civ. Code 1542, which provides: A general release does not extend to claims which the creditor does not know or suspect exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. Plaintiffs and Defendants acknowledge, and all Class Members and any successors, assigns, and persons claiming through or on behalf of any of the foregoing, shall, by operation of law, be deemed to have acknowledged, that the inclusion of Unknown Claims in the definition of Released Claims and Settled Defendants Claims were separately bargained for and constitute material elements of this Settlement. EXCLUDING YOURSELF FROM THE SETTLEMENT If you do not want a payment from this settlement, but you want to keep the right to sue or continue to sue any of the Defendants or other Released Parties on your own about the same legal issues in this case, then you must take steps to get out of the Class. This is called excluding yourself or is sometimes referred to as opting out of the Class. 13. How Do I Get Out of the Class? To exclude yourself from the Class, you must send a letter by mail stating that you want to be excluded from Levin v. Resource Capital Corp., et al., 1:15-CV You must include your name, address, telephone number, signature, the number and type of Resource Capital securities you purchased or otherwise acquired between October 31, 2012 and August 5, 2015, and the dates of such purchases. You must mail your exclusion request postmarked no later than July 5, 2018 to: Resource Capital Corp. Securities Litigation EXCLUSIONS Claims Administrator P.O. Box 4850 Portland, OR T8047 v

204 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 9 of 19 You cannot exclude yourself by phone or by . If you ask to be excluded, you are not eligible to get any settlement payment, and you cannot object to the settlement. You will not be legally bound by anything that happens in this lawsuit. 14. If I Do Not Exclude Myself, Can I Sue the Defendants for the Same Thing Later? No. Unless you exclude yourself, you give up any right to sue the Defendants or other Released Parties for the claims resolved by the class action settlement. If you have a pending lawsuit against any of the Defendants, speak to your lawyer in that case immediately. Remember the exclusion deadline is July 5, If I Exclude Myself, Can I Get Money from This Settlement? No. If you exclude yourself, you will not be eligible to participate in the Settlement and should not send in a Proof of Claim Form. However you may sue, continue to sue, or be part of a different lawsuit against any of the Defendants. 16. Do I Have a Lawyer in This Case? THE LAWYERS REPRESENTING YOU The Court asked the law firm Levi & Korsinsky, LLP to represent you and other Class Members. These lawyers are called Lead Counsel. You will not be charged for the services of these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense. 17. How Will the Lawyers Be Paid? Lead Counsel will ask the Court for attorneys fees of up to 33% of the Settlement Fund ($3,166,667) and for reimbursement of their out-of-pocket litigation expenses up to $200,000, that were advanced in connection with the Action. Such sums as may be approved by the Court will be paid from the Settlement Fund. Class Members are not personally liable for any such fees or expenses. The attorneys fees and expenses requested will be the only payment to Lead Counsel for their efforts in achieving this settlement and for the risk in undertaking this representation on a wholly contingent basis. To date, Lead Counsel has not been paid for their services for conducting this litigation on behalf of the Lead Plaintiff and Class nor for their substantial out-of-pocket expenses. The fees requested will compensate Lead Counsel for their work in achieving the Settlement Fund and are within the range of fees awarded to class counsel under similar circumstances in other cases of this type. The Court may award less than this amount. Lead Counsel will also request reimbursement of attorneys fees and expenses for administration of the settlement including costs associated with notice and the fees and expenses of the Claims Administrator. Those amounts will be requested before distribution of the Net Settlement Fund to Class Members. Again, such sums as may be approved by the Court will be paid from the Settlement Fund. Lead Counsel will also request the Court to award Lead Plaintiff Douglas Drees an incentive award of $10,000 and Additional Plaintiff Allen Altman an incentive award of $5,000 as a reward for their active participation in the Action. OBJECTING TO THE SETTLEMENT You can tell the Court that you do not agree with the settlement or any part of it. 18. How Do I Tell the Court that I Do Not Like the Settlement? If you are a Class Member, you can object to the settlement if you do not like any part of it. You can give reasons why you think the Court should not approve it. The Court will consider your views. To object, you must send a letter saying that you object to the settlement in Levin v. Resource Capital Corp., et al., 1:15-CV Be sure to include the reasons you object to the settlement as well as the following information: your name, address, telephone T8048 v

205 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 10 of 19 number, signature, and a list of all your purchases of Resource Capital common stock, Series B preferred stock, and Series C preferred stock between October 31, 2012 and August 5, Any objection to the settlement must be mailed or delivered such that it is received by the following no later than July 13, Nicholas I. Porritt, Esq. Levi & Korsinsky, LLP th Street NW, Suite 115 Washington, DC Lead Counsel will then immediately provide to Defendants Counsel any such objection. 19. What s the Difference between Objecting and Excluding? Objecting is simply telling the Court that you do not like something about the settlement. You can object only if you stay in the Class. Excluding yourself is telling the Court that you do not want to be part of the Class. If you exclude yourself, you have no basis to object because the case no longer affects you. THE COURT S FAIRNESS HEARING The Court will hold a hearing to decide whether to approve the settlement. You may attend, and you may ask to speak, but you do not have to. 20. When and Where Will the Court Decide Whether to Approve the Settlement? The Court will hold a fairness hearing at 12:00 p.m., on August 3, 2018 at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, Courtroom 21C, New York, New York At this hearing, the Court will consider whether the settlement of the Action is fair, reasonable, and adequate. If there are objections, the Court will consider them. The Court will listen to people who have asked to speak at the hearing. The Court will also consider how much to pay to Lead Counsel. The Court may decide these issues at the hearing or take them under consideration. We do not know how long these decisions will take. 21. Do I Have to Come to the Hearing? No. Lead Counsel will answer any questions the Court may have on behalf of Class Members. However, you are welcome to come at your own expense. If you send an objection, you do not have to come to Court to talk about it. As long as you mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary. 22. May I Speak at the Hearing? You may ask the Court for permission to speak at the Final Approval Hearing. To do so, you must send a letter saying that it is your intention to appear in Levin v. Resource Capital Corp., et al., 1:15-CV Be sure to include your name, address, telephone number, signature, and the number and type of Resource Capital securities purchased between October 31, 2012 and August 5, Your notice of intention to appear must be received no later than July 13, 2018 by Lead Counsel at the address listed in question 18. You cannot speak at the hearing if you exclude yourself from the Class. 23. What Happens if I Do Nothing at All? IF YOU DO NOTHING If you do nothing, you will get no money from this Settlement. But, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against the Defendants or other Released Parties about the same legal issues in this case. T8049 v

206 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 11 of 19 GETTING MORE INFORMATION 24. Are There More Details About the Settlement? This Notice summarizes the proposed settlement. More details are in the Stipulation and Agreement of Settlement dated as of February 5, You can get a copy of the Stipulation or more information about the Settlement by visiting You can also contact the Claims Administrator: Or Lead Counsel: Resource Capital Corp. Securities Litigation Claims Administrator P.O. Box 4850 Portland, OR Nicholas I. Porritt, Esq. Levi & Korsinsky, LLP th Street NW, Suite 115 Washington, DC You can also obtain a copy from the Clerk s Office during regular business hours: Clerk of Court U.S. Courthouse 500 Pearl Street New York, NY DO NOT TELEPHONE THE COURT OR DEFENDANTS COUNSEL REGARDING THIS NOTICE. SPECIAL NOTICE TO NOMINEES If you purchased or acquired shares of any Resource Capital securities between October 31, 2012 and August 5, 2015, then, within ten (10) days after you received this Notice, you must either: (1) send a copy of this Notice and Proof of Claim Form by first class mail to all such beneficial owners; or (2) provide a list of names and addresses of such Persons to the Claims Administrator: Resource Capital Corp. Securities Litigation Claims Administrator P.O. Box 4850 Portland, OR If you choose to mail the Notice and Proof of Claim Form yourself, you may obtain from the Claims Administrator (without cost to you) as many additional copies of these documents as you will need to complete the mailing. Regardless of whether you choose to complete the mailing yourself or elect to have the mailing performed for you, you may obtain reimbursement for or advancement of reasonable administrative costs actually incurred or expected to be incurred in connection with forwarding the Notice and which would not have been incurred but for the obligation to forward the Notice, upon submission of appropriate documentation to the Claims Administrator. DATED: April 3, 2018 BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK T80410 v

207 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 12 of 19 Resource Capital Corp. Securities Litigation Toll Free Number: Claims Administrator Website: P.O. Box Portland OR Exclusion Deadline: 07/05/2018 Objection Deadline: 07/13/2018 Deadline to File a Claim: 07/23/2018 Final Approval Hearing: 08/03/2018 PROOF OF CLAIM AND RELEASE Before completing this form, please read the detailed instructions on page 7. When filling out this form, type or print in the boxes below in CAPITAL LETTERS; do not use red ink, pencils, or staples. PART I: CLAIMANT INFORMATION Beneficial Owner s First Name MI Beneficial Owner s Last Name Co-Beneficial Owner s First Name MI Co-Beneficial Owner s Last Name Entity Name (if claimant is not an individual) Representative or Custodian Name (if different from Beneficial Owner(s) listed above) Account Number (if filing for multiple accounts, file a separate Proof of Claim Form for each account) Address 1 (street name and number) Address 2 (apartment, unit, or box number) City State ZIP Code Foreign Country (only if not USA) Social Security Number Taxpayer Identification Number OR Telephone Number (home) Telephone Number (work) Address Claimant Account Type (check appropriate box): Individual (includes joint owner accounts) Pension Plan Trust Corporation Estate IRA/401K Other (please specify) 01-CA7320 T8051 v

208 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 13 of 19 PART II: SCHEDULE OF TRANSACTIONS IN RESOURCE CAPITAL COMMON STOCK A. Number of shares of Resource Capital common stock held at the beginning of trading on October 31, 2012: B. Purchases or other acquisitions, including by way of exchange or otherwise (from October 31, 2012 to August 4, 2015) of Resource Captial common stock: Trade Date (MMDDYY) Number of Shares Purchased or Acquired Purchase Price per Share Total Purchase Price* Transaction Type (P/R)** *Excluding taxes, fees and commissions **P=Purchase, R=Receipt (transfer in) C. Sales (from October 31, 2012 to August 4, 2015) of Resource Capital common stock: Trade Date (MMDDYY) Number of Shares Sold or Delivered Sale Price per Share Total Sale Price* Transaction Type (S/D)** *Excluding taxes, fees and commissions **S=Sale, D=Delivery (transfer out) D. Number of shares of Resource Captial common stock held as of the close of trading on August 4, 2015: 02-CA7320 T8052 v

209 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 14 of 19 PART III: SCHEDULE OF TRANSACTIONS IN RESOURCE CAPITAL SERIES B PREFERRED SHARES A. Number of shares of Resource Capital Series B preferred stock ( Series B preferred stock ) held at the beginning of trading on October 31, 2012: B. Purchases or other acquisitions, including by way of exchange or otherwise (from October 31, 2012 to August 4, 2015) of Series B preferred stock: Trade Date (MMDDYY) Number of Shares Purchased or Acquired Purchase Price per Share Total Purchase Price* Transaction Type (P/R)** *Excluding taxes, fees and commissions **P=Purchase, R=Receipt (transfer in) C. Sales (from October 31, 2012 to August 4, 2015) of Series B preferred stock: Trade Date (MMDDYY) Number of Shares Sold or Delivered Sale Price per Share Total Sale Price* Transaction Type (S/D)** *Excluding taxes, fees and commissions **S=Sale, D=Delivery (transfer out) D. Number of shares of Series B preferred stock held as of the close of trading on August 4, 2015: 03-CA7320 T8053 v

210 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 15 of 19 PART IV: SCHEDULE OF TRANSACTIONS IN RESOURCE CAPITAL SERIES C PREFERRED STOCK A. Purchases or other acquisitions, including by way of exchange or otherwise (from June 3, 2014 to August 4, 2015) of Series C preferred stock: Trade Date (MMDDYY) Number of Shares Purchased or Acquired Purchase Price per Share Total Purchase Price* Transaction Type (P/R)** *Excluding taxes, fees and commissions **P=Purchase, R=Receipt (transfer in) B. Sales (from June 3, 2014 to August 4, 2015) of Series C preferred stock: Trade Date (MMDDYY) Number of Shares Sold or Delivered Sale Price per Share Total Sale Price* Transaction Type (S/D)** *Excluding taxes, fees and commissions **S=Sale, D=Delivery (transfer out) C. Number of shares of Series C preferred stock held as of the close of trading on August 4, 2015: 04-CA7320 T8054 v

211 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 16 of 19 PART V: SUBMISSION TO JURISDICTION OF COURT AND ACKNOWLEDGMENTS I (We) submit this Proof of Claim and Release under the terms of the Stipulation and Agreement of Settlement, dated February 5, 2018 ( Stipulation ) described in the Notice. I (We) also submit to the jurisdiction of the United States District Court for the Southern District of New York, with respect to my (our) claim as a Class Member (as defined in the Notice) and for purposes of enforcing the release set forth herein. I (We) further acknowledge that I am (we are) bound by and subject to the terms of any judgment that may be entered in the Action. I (We) agree to furnish additional information to Lead Counsel to support this claim if required to do so. I (We) have not submitted any other claim covering the same purchases or sales of Resource Capital securities during the Class Period and know of no other Person having done so on my (our) behalf. PART VI: RELEASE 1. I (We) hereby acknowledge, on behalf of myself (ourselves) and each of my (our) heirs, executors, administrators, predecessors, successors and assigns, and any other person claiming by, through or on behalf of me (us) that I (we): (a) fully, finally and forever settle, release, waive, relinquish, discharge and dismiss each and every of the Released Claims against the Released Parties; (b) am (are) forever enjoined from commencing, instituting or prosecuting any or all of the Released Claims against the Released Parties; and (c) am (are) forever enjoined from instituting, continuing, maintaining or asserting, either directly or indirectly, whether in the United States or elsewhere, on my (our) own behalf or on behalf of any class or any other person, any action, suit, cause of action, claim or demand against any person or entity who may claim any form of contribution or indemnity from any of the Released Parties in respect of any Released Claim or any matter related thereto. 2. Released Claims means any and all claims, debts, demands, rights or causes of action or liabilities whatsoever (including, but not limited to, any claims for damages, interest, attorneys fees, expert or consulting fees, and any other costs, penalties, expenses or liability whatsoever, whenever or wherever incurred), whether based on federal, state, local, foreign, statutory, or common law or any other law, rule or regulation, whether fixed or contingent, accrued or unaccrued, liquidated or unliquidated, at law or in equity, matured or unmatured, whether class, individual, or otherwise in nature, whether personal or subrogated, whether suspected or unsuspected, including both known claims and Unknown Claims: (1) that have been asserted in this Action against any of the Released Parties, or (2) that have been or could have been asserted in this Action or any forum by either Plaintiff or any Class Member (or any person or and/or entity claiming by, through, or on behalf of any Plaintiff or Class Member) against any of the Released Parties which in any way, directly or indirectly, arise out of or are related to (i) the Mezzanine Loan or any statement or omission related to the Mezzanine Loan by any Released Party, (ii) any of the factual allegations of the Complaints, (iii) any misrepresentation or omission or alleged misrepresentation or omission by any Released Party before or during the Class Period related to or in connection with Resource Capital or any of its subsidiaries or the purchase or sale of Common Shares, Series B Preferred Shares or Series C Preferred Shares or any other security issued by Resource Capital, or (iv) any loss sustained or allegedly sustained as a result of the purchase, sale, or holding of Common Shares, Series B Preferred Shares, or Series C Preferred Shares, or other security issued by Resource Capital during the Class Period. Notwithstanding the foregoing, Released Claims does not include (i) claims relating to the enforcement of the Settlement or its terms, or (ii) claims asserted derivatively on behalf of Resource Capital, including (without limitation) any of the derivative claims pending in In re Resource Capital Corp. Shareholder Derivative Litigation Demand Futile Actions, No. 1:17-cv LLS (S.D.N.Y.), In re Resource Capital Corp. Shareholder Derivative Litigation Demand Refused Actions, No. 1:17-cv LLS (S.D.N.Y.), or any other pending shareholder derivative action relating to the Mezzanine Loan. 3. Unknown Claims means any and all Released Claims that any Plaintiff or Class Member does not know or suspect to exist in his, her or its favor at the time of the release of the Released Parties, and any of the Settled Defendants Claims which Defendants do not know or suspect to exist in his, her or its favor, which if known by him, her or it might have affected his, her or its decision(s) with respect to the Settlement. With respect to any and all Released Claims and Settled Defendants Claims, Plaintiffs and Defendants stipulate and agree that upon the Effective Date, Plaintiffs and Defendants shall each, for themselves and all persons claiming by, through, or on behalf of them, expressly waive, and each Class Member shall be deemed to have waived, and by operation of the Judgment shall have expressly waived, any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, that is similar, comparable, or equivalent to Cal. Civ. Code 1542, which provides: A general release does not extend to claims which the creditor does not know or suspect exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. 05-CA7320 T8055 v

212 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 17 of 19 Plaintiffs and Defendants acknowledge, and all Class Members and any successors, assigns, and persons claiming through or on behalf of any of the foregoing, shall, by operation of law, be deemed to have acknowledged that the inclusion of Unknown Claims in the definitions of Released Claims and Settled Defendants Claims were separately bargained for and constitute material elements of the Settlement. 4. Released Parties means (a) Defendants; (b) each of their respective current and former officers, directors, employees, agents, servants, representatives, parents, subsidiaries, affiliates, controlled persons, controlling persons, predecessors, assigns, assignees, counsel, members, managers, equity holders, trustees, accountants, advisors, insurers, family members and partners; (c) as to any person described in clause (b) that is not a natural person, each of their respective current and former officers, directors, employees, agents, servants, representatives, parents, subsidiaries, affiliates, controlled persons, controlling persons, predecessors, assigns, assignees, counsel, members, managers, equity holders, trustees, accountants, advisors, insurers, family members and partners; and (d) as to any of the foregoing, and each of their respective heirs, executors, administrators, legal representatives, successors and assigns. 5. This release shall be of no force or effect unless and until the Court approves the Settlement set forth in the Stipulation and it becomes effective on the Effective Date. 6. I (We) hereby warrant and represent that I (we) have not assigned or transferred or purported to assign or transfer, voluntarily or involuntarily, any matter released pursuant to this release or any other part or portion thereof. 7. I (We) hereby warrant and represent that I (we) have included information about all of my (our) transactions in Resource Capital securities that occurred during the Class Period as well as the number and type of Resource Capital securities held by me (us) at the opening of trading on October 31, 2012, and the close of trading on August 4, I (We) certify that I am (we are) not subject to backup withholding under the provisions of Section 3406(a)(1)(C) of the Internal Revenue Code. Note: If you have been notified by the Internal Revenue Service that you are subject to backup withholding, please strike out the language that you are not subject to backup withholding in the certification above. PART VII: CERTIFICATION I (We) declare under penalty of perjury under the laws of the United States of America that the foregoing information supplied by the undersigned is true and correct. Signature of Claimant Print Name of Claimant Date: MM DD YY Signature of Joint Claimant, if any Print Name of Joint Claimant Date: MM DD YY 06-CA7320 T8056 v

213 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 18 of 19 PROOF OF CLAIM FORM INSTRUCTIONS A. This Proof of Claim Form has been sent to you because you may be a member of the Class in this matter. To participate, you must complete and sign this Proof of Claim Form and provide supporting documents for any eligible transactions you claim. If you fail to file a properly addressed Proof of Claim Form and supporting documents, your claim may be rejected, and you may be determined to be ineligible for any payment from the Net Settlement Fund. B. Submission of this Proof of Claim Form does not assure that you will share in the proceeds of the Net Settlement Fund created in this Action. C. YOU MUST COMPLETE AND SUBMIT YOUR PROOF OF CLAIM FORM BY MAIL POSTMARKED ON OR BEFORE JULY 23, 2018, ADDRESSED TO THE CLAIMS ADMINISTRATOR AS LISTED BELOW: Resource Capital Corp. Securities Litigation Claims Administrator P.O. Box 4850 Portland, OR D. If you are NOT a member of the Class, as defined in the Notice of Pendency and Proposed Settlement of Class Action ( Notice ), DO NOT submit a Proof of Claim Form. E. If you are a member of the Class and you do not timely request to be excluded from the Class, you are bound by the terms of any judgment entered in the Action, WHETHER OR NOT YOU SUBMIT A PROOF OF CLAIM FORM. F. Use the section of this form entitled Claimant Identification to identify each owner of record. THIS CLAIM MUST BE FILED BY THE ACTUAL BENEFICIAL OWNER(S), OR THE LEGAL REPRESENTATIVE OF SUCH OWNER(S) OF SHARES UPON WHICH THIS CLAIM IS BASED. G. Use Part II, III, and IV of the form to supply all required details of your transaction(s). If you need more space or additional schedules, attach separate sheets giving all of the required information in substantially the same form. Sign and print or type your name on each additional sheet. H. Complete a separate claim form for each account in which you qualify. I. Provide all of the requested information with respect to the Resource Capital securities that you acquired at any time between October 31, 2012 and August 5, 2015 (the Class Period ), whether such transactions resulted in a profit or a loss. Failure to report all such transactions may result in the rejection of your claim. J. List each transaction in the Class Period in chronological order, by trade date, beginning with the earliest. You must accurately provide the month, day and year of each transaction you list. K. Documentation of your transactions in Resource Capital securities must be attached to your claim. Failure to provide this documentation could delay verification of your claim or result in rejection of your claim. L. The above requests are designed to provide the minimum amount of information necessary to process the most simple claims. The Claims Administrator may request additional information as required to efficiently and reliably calculate your losses. Proof of Claim Forms must be postmarked no later than July 23, 2018 and mailed to Resource Capital Corp. Securities Litigation, Claims Administrator, P.O. Box 4850, Portland, OR ATTENTION NOMINEES AND BROKERAGE FIRMS: If you are filing claim(s) electronically on behalf of beneficial owners, detailed instructions are available on the Settlement website at along with the formatted electronic filing template. You may also send an to info@resourcecapitalsecuritieslitigation.com requesting this information. 07-CA7320 T8057 v

214 Case 1:15-cv LLS Document 87-1 Filed 06/29/18 Page 19 of 19 Reminder Checklist 1. Sign the Certification section of the Proof of Claim Form on page Remember to attach supporting documentation. 3. Do not send original documents. 4. Keep a copy of your Proof of Claim Form and all documents submitted for your records. 5. If you desire an acknowledgment of receipt of your Proof of Claim Form, send your Proof of Claim Form by certified mail, return receipt requested. 6. If you move, please send the Claims Administrator your new address. ACCURATE CLAIMS PROCESSING CAN TAKE A SIGNIFICANT AMOUNT OF TIME. THANK YOU FOR YOUR PATIENCE. 08-CA7320 T8058 v

215 Case 1:15-cv LLS Document 87-2 Filed 06/29/18 Page 1 of 3 Exhibit B

216 Case 1:15-cv LLS Document 87-2 Filed 06/29/18 Page 2 of 3 Resource Capital Corp. Securities Litigation Website: Claims Administrator info@resourcecapitalsecuritieslitigation.com P.O. Box 4850 Phone: Portland, OR NOTICE TO BROKERS, BANKS, AND OTHER NOMINEES TIME-SENSITIVE, COURT-ORDERED ACTION REQUIRED ON YOUR PART Levin v. Resource Capital Corp., et al. Securities Litigation Case No. 1:15-cv A proposed settlement of the above-noted securities class action has been reached. Enclosed is the Notice of the proposed Settlement and Proof of Claim and Release Form (the Notice Packet ) that the Court has ordered be timely sent to potential Class Members. The Settlement Class consists of all persons or entities who purchased or otherwise acquired publicly traded Resource Capital Corp. common stock, Series B preferred stock, or Series C preferred stock during the period between October 31, 2012 and August 5, 2015 (the Class Period ), and were damaged thereby. The CUSIP for Resource Capital common stock was 76120W708, the CUSIP for Resource Capital s Series B preferred stock was 76120W500, and the CUSIP for Resource Capital s Series C preferred stock was 76120W609. If you are a broker or other nominee who purchased or otherwise acquired Resource Capital Corp. common stock, Series B preferred stock, or Series C preferred stock during the period between October 31, 2012 and August 5, 2015, for the beneficial interest of a person or entity other than yourself, WITHIN TEN (10) CALENDAR DAYS OF YOUR RECEIPT OF THE ENCLOSED NOTICE PACKET, you must do one of the following: (a) Provide the Claims Administrator, Epiq, with a list of the names and last known addresses of all such beneficial owners described above (b) Request from the Claims Administrator sufficient copies of the enclosed Notice Packet to forward to all such beneficial owners and, within seven (7) calendar days of receipt of those copies, forward the Notice Packet to all such beneficial owners PLEASE NOTE: These documents contain deadlines that could impact your customers rights. If you are providing a list of names and addresses to the Claims Administrator, please do the following: (a) Compile a list of names and last known addresses of the beneficial owners described above (b) Prepare the list in Microsoft Excel format following the Electronic Name and Address File Layout set forth on page 2 below. A preformatted spreadsheet can also be found on the Nominees page of the website, (c) Then you must do one of the following: 1. Burn the Microsoft Excel file(s) to a CD or DVD and mail the CD or DVD to: Resource Capital Corp. Securities Litigation P.O. Box 4850 Portland, OR the spreadsheet to info@resourcecapitalsecuritieslitigation.com 3. Upload the spreadsheet to the Nominees page of the website, T8601 v For questions, please call

217 Case 1:15-cv LLS Document 87-2 Filed 06/29/18 Page 3 of 3 If you are going to forward the Notice Packet to the beneficial owners, request the needed number of copies of the Notice Packet via to info@resourcecapitalsecuritieslitigation.com. You must mail the Notice Packets to the beneficial owners within seven (7) calendar days of your receipt of the Notice Packets. Expense Reimbursement Reasonable expenses are eligible for reimbursement (including postage and costs to compile names and addresses), provided an invoice documenting the expenses is timely submitted to the Claims Administrator. Please submit your invoice within one month of completing the mailing or providing your file. Electronic Name and Address File Layout Column Description Length Notes A Account # 15 Unique identifier for each record B Beneficial owner's first name 25 C Beneficial owner's middle name 15 D Beneficial owner's last name 30 E Joint beneficial owner's first name 25 F Joint beneficial owner's middle name 15 G Joint beneficial owner's last name 30 H Business or record owner's name 60 Businesses, trusts, IRAs, and other I Representative or contact name 45 types of accounts J Address 1 35 K Address 2 25 L City 25 M U.S. state or Canadian province 2 U.S. and Canada addresses only 1 N ZIP code 10 O Country (other than U.S.) 15 For further details, please refer to page 10 of the enclosed Notice. If you have any questions, you may contact the Claims Administrator at or by at info@resourcecapitalsecuritieslitigation.com. Thank you for your cooperation. 1 For countries other than the U.S. and Canada, place any territorial subdivision in Address 2 field. T8602 v For questions, please call

218 Case 1:15-cv LLS Document 87-3 Filed 06/29/18 Page 1 of 3 Exhibit C

219 Case 1:15-cv LLS Document 87-3 Filed 06/29/18 Page 2 of 3 Levi & Korsinsky, LLP Announces Proposed Class Action Settlement on Behalf of Purchasers of Resource Capital Corp. Common Stock NEWS PROVIDED BY Levi & Korsinsky, LLP 07:59 ET NEW YORK, April 17, 2018 /PRNewswire/ -- UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, individually and on behalf of all others similarly situated, Case No. 1:15-cv Hon. Louis L. Stanton Plaintiff, v. RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Defendants. TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR OTHERWISE ACQUIRED RESOURCE CAPITAL CORP. ("RESOURCE CAPITAL") SECURITIES BETWEEN OCTOBER 31, 2012 AND AUGUST 5, YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure that a hearing will be held on August 3, 2018, at 12:00 p.m., before the Honorable Louis L. Stanton, United States District Judge, at the Courthouse for the United States District Court, Southern District of New York, Courtroom 21C, Daniel Patrick Moynihan Courthouse, 500 Pearl Street, New York, New York 10007, for the purpose of determining, among other things, whether the following matters should be approved by the Court: (1) the proposed Settlement of the claims in the Action for the combined sum of $9,500,000 in cash as fair, reasonable, and adequate to the Members of the Class; (2) whether, thereafter, the Action should be dismissed with prejudice as set forth in the Stipulation and Agreement of Settlement dated February 5, 2018

220 Case 1:15-cv LLS Document 87-3 Filed 06/29/18 Page 3 of 3 ("Stipulation"); (3) whether the Plan of Allocation is fair, reasonable, and adequate and therefore should be approved; (4) whether the application of Lead Counsel for the payment of attorneys' fees and reimbursement of expenses incurred in connection with the Action should be approved; and (5) whether the Lead Plaintiff and Additional Plaintiff should be awarded an incentive award. If you purchased or otherwise acquired common stock, Series B preferred stock, and/or Series C preferred stock between October 31, 2012 and August 5, 2015, your rights may be affected by the settlement of this Class Action. If you have not received the detailed Notice of Pendency and Proposed Settlement of Class Action (the "Notice") and a copy of the Proof of Claim and Release Form, you may obtain them free of charge by contacting the Claims Administrator, by mail at: Resource Capital Corp. Securities Litigation, Claims Administrator, P.O. Box 4850 Portland, OR If you are a member of the Class and wish to share in the distribution of the Net Settlement Fund, you must submit a Proof of Claim no later than July 23, 2018 establishing that you are entitled to recovery. As further described in the Notice, you will be bound by any Judgment entered in the Action, regardless of whether you submit a Proof of Claim, unless you exclude yourself from the Class, in accordance with the procedures set forth in the Notice, no later than July 5, Any objections to the Settlement, Plan of Allocation, or attorneys' fees and expenses must be led and served, in accordance with the procedures set forth in the Notice, no later than July 13, Inquiries, other than requests for the Notice, may be made to Lead Counsel for the Class: Nicholas I. Porritt, Esq, Levi & Korsinsky, LLP, th Street, N.W., Suite 115, Washington, D.C , nporritt@zlk.com. INQUIRIES SHOULD NOT BE DIRECTED TO THE COURT, THE CLERK'S OFFICE, THE DEFENDANTS, OR DEFENDANTS' COUNSEL. If you have any questions about the Settlement, you may contact Lead Counsel at the address listed above. DATED: April 3, 2018 BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SOURCE Levi & Korsinsky, LLP

221 Case 1:15-cv LLS Document 90 Filed 06/29/18 Page 1 of 3 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK DAREN LEVIN, Individually and on Behalf of All Others Similarly Situated, Case No. 1:15-cv LLS Plaintiff, v. RESOURCE CAPITAL CORP., JONATHAN Z. COHEN, DAVID J. BRYANT, ELDRON C. BLACKWELL, and DAVID E. BLOOM, Defendants. DECLARATION OF CASEY E. SADLER IN SUPPORT OF LEAD COUNSEL S MOTION FOR AN AWARD OF ATTORNEYS FEES ON BEHALF OF GLANCY PRONGAY & MURRAY LLP

222 Case 1:15-cv LLS Document 90 Filed 06/29/18 Page 2 of 3 I, Casey E. Sadler, hereby declare: 1. I am a partner in the law firm of Glancy Prongay & Murray LLP ( GPM ). I submit this declaration in support of GPM s application for an award of attorneys fees in connection with the services rendered in the Action. I have personal knowledge of the facts set forth herein and, if called upon, could and would testify thereto. 2. The schedule attached hereto as Exhibit 1 is a detailed summary indicating the amount of time spent by GPM attorneys and professional support staff employees who, from the inception of the Action, billed hours to the Action, and the lodestar calculation for those individuals based on GPM s current billing rates. The schedule was prepared from contemporaneous daily time records regularly prepared and maintained by GPM. 3. The hourly rates for GPM s attorneys and professional support staff included in Exhibit 1 are substantially the same as rates that have been accepted by courts in other securities or shareholder litigation, and are reasonable hourly billing rates for the Los Angeles area, where GPM is located. The billing rates also do not include charges for expense items, which are billed separately so as not to be duplicated in GPM s billing rates. 4. The total number of hours reflected in Exhibit 1 from inception of the Action through and including June 28, 2018, is hours. The total lodestar reflected in Exhibit 1 for that period is $18,585.50, consisting of $17, for attorneys time and $1, for professional support staff time. 5. A copy of the Firm s resume is attached hereto as Exhibit GPM is not seeking reimbursement for any expenses incurred in litigating the Action. 1

223 Case 1:15-cv LLS Document 90 Filed 06/29/18 Page 3 of 3

224 Case 1:15-cv LLS Document 90-1 Filed 06/29/18 Page 1 of 2 EXHIBIT 1

225 Case 1:15-cv LLS Document 90-1 Filed 06/29/18 Page 2 of 2 GLANCY PRONGAY MURRAY LLP FIRM LODESTAR REPORT FROM INCEPTION EXHIBIT IN RE RESOURCE CAPTIAL LITIGATION INCEPTION THROUGH JUNE 28, 2018 TIMEKEEPER/CASE STATUS HOURS RATE LODESTAR ATTORNEYS: Robert Prongay Partner , Casey Sadler Partner , Charles Linehan Associate , TOTAL ATTORNEY ZTOTAL , PARALEGALS: Harry Kharadjian Senior Paralegal Michaela Ligman Research Analyst TOTAL PARALEGAL ZTOTAL , TOTAL LODESTAR ZZTOTAL , _1.xlsx RESOURCECAP LODESTAR CHART Page 1 of 1

226 Case 1:15-cv LLS Document 90-2 Filed 06/29/18 Page 1 of 27 EXHIBIT 2

227 Case 1:15-cv LLS Document 90-2 Filed 06/29/18 Page 2 of Century Park East, Suite 2100 Los Angeles, CA T: FIRM RESUMEE Glancy Prongay & Murray LLP (the Firm ) has represented investors, consumerss and employees for over 25 years. Based in Los Angeles, with offices in New York City and Berkeley, the Firm has successfully prosecutedd class action casess and complex litigation in federal and state courts throughout thee country. As Lead Counsel or as a member of Plaintiffs Counsel Executive Committees, the Firm has recovered billions of dollars for parties wronged by corporate fraud and malfeasance. Indeed, the Institutional Shareholder Services unit of RiskMetricss Group has recognized the Firm as one of the top plaintiffs law firms in the United States in its Securities Class Action Services report for every year since the inception of the report in The Firm s efforts have been publicized in major newspapers such as the Wall Street Journal, the New York Times, and the Los Angeles Times. Glancy Prongay & Murray s commitment to highh quality and excellent personalized servicess has boosted its national reputation, and we are now recognized as one of the premier plaintiffs firms in the country. The Firm works tenaciously on behalf of clients to produce significant results and generate lasting corporate reform. The Firm s integrity and success originate from our attorneys, who are among the brightest and most experienced in the field. Our distinguished litigators have an unparalleled track record of investigating and prosecuting corporate wrongdoing. The Firm is respected for both the zealous advocacy with which we represent our clients interestss as well as the highly-professional and ethical manner by which we achieve results. We are ideally positioned to interpret securities litigation, consumer litigation, antitrustt litigation, and derivative and corporate takeover litigation. The Firm s outstanding accomplishmentss are the direct result of the exceptional talents of our attorneys and employees. Appointed as Lead or Co-Lead Counsel by judges throughout the United States, Glancy Prongay & Murray has achieved significant recoveries for class members, including: In re Mercury Interactive Corporation Securities Litigation, USDC Northern District of California, Case No JF, in which the Firm served as Co-Lead Counsel and achieved a settlement valued at over $117 million. In re Real Estate Associatess Limited Partnership Litigation, USDC Central District of California, Case No DDP, in which thee Firm served as local counsel and plaintiffs achieved a $184 million jury verdict after a complex six week trial in Los Angeles, Californiaa and later settled the case for $83 million OFFICE Page 1