LAYOFFS ‘LYING IN WAIT’? – Layoffs this past week on both coasts have again unsettled Big Law, and analysts told Law.com’s Andrew Maloney that the “difficult decisions” at law firms are probably not over yet this year, especially if the economy experienced more turmoil in 2023. Both New York-based Shearman & Sterling and Seattle-based Davis Wright Tremaine are the latest to make waves in the legal industry, joining the list of law firms making personnel cuts to start 2023 and citing a need to realign capacity with existing and projected demand. Analysts note that, while the current situation is nothing like 2009, which featured reams of layoffs and furloughs, mixed economic projections in 2023 along with odd fundamentals this year have forced companies and law firms to take some action. “Most firm leaders I have spoken with said 2023 will be the most challenging year since the pandemic started,” said Kent Zimmermann, a law firm consultant at the Zeughauser Group.
SETTLING UP – Securities litigation filings may have settled in at a “baseline” of 200 to 225 cases per year after a two-year deviation in 2018-2019 to roughly twice that caseload due to issues emanating from SPACs, but, as Law.com’s Christine Schiffner reports, settlement values have skyrocketed. “2022 brought more than $4 billion in settlements, which was double what we saw for 2021,” Labaton Sucharow chairman Christopher Keller told The National Law Journal—an upward trend he and many other plaintiffs lawyers believe will continue. “There will be a significant number of high-value settlements being struck in the next three to five years.” A recent report by ISS tallies the total settlement amount in securities class actions in 2022 at $4.77 billion, while a recent report by Cornerstone Research shows 69% of the core federal filings were made in the Second and Ninth circuits.
ON THE RADAR – The Commodity Futures Trading Commission sued FXL Investment PR, Ramon S. Gomez and other defendants Friday in Puerto Rico District Court over an alleged Ponzi scheme. The lawsuit accuses the defendants of misappropriating at least $13 million of pool participants’ funds to pay purported returns and referral commissions to existing pool participants. The complaint further contends that the defendants used pool participant funds to pay business and personal expenses. Counsel have not yet appeared for the defendants. The case is 3:23-cv-01065, Commodity Futures Trading Commission v. FX Latino, Inc. et al. Stay up on the latest deals and litigation with the new Law.com Radar.
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