Attorneys who led a class action data security lawsuit on behalf of investors against cybersecurity firm Okta could be in line for more than $13 million in fees, under a request lodged in court, along with their motion to complete a $60 million settlement deal.
Earlier this month, attorneys with the firms of Labaton Keller Sucharow, of New York, and Adamski Moroski Madden Cumberland & Green, of San Luis Obispo, filed their motion for final approval of their settlement of their litigation against Okta.
The motion was filed before U.S. District Judge Susan Illston, in the Northern District of California court in San Francisco.
Along with that motion, the attorneys also separately requested the judge award them 22% of the settlement - or about $13.2 million - as fees to cover work they claim they performed in securing the deal with Okta.
A hearing is scheduled to consider both the fee request and final approval of the deal on Nov. 8.
Investors who held shares of Okta from March to August 2022 are eligible to claim a cut of the settlement. The deadline to submit claims is Oct. 29.
The settlement documents do not indicate how much investors should expect to receive from the approximately $46 million left after attorneys claim their fees.
The lawsuit has been in court since 2022, when a flurry of lawsuits took aim at Okta for allegedly not informing investors of a data security breach in early 2022 that followed Okta's acqusition of competitor Auth0.
According to the lawsuit, the breach from hackers known as LAPSUS$ allegedly impacted 2.5% of Okta's 15,000 customers at the time.
The lawsuit asserts Okta withheld information about the breach from the public and from investors, allegedly to hide problems the company was experiencing integrating Auth0 into its operations.
The lawsuit claimed the revelation of the breach eventually caused Okta investors to collectively lose $600 million or more, as its shares dropped 11%.
The plaintiffs claimed Okta's actions allegedly violated federal securities laws and disclosure rules.
The lawsuit was led by led by two public worker pension funds, identified as the Nebraska Investment Council and North Carolina Retirement Systems. Such public pension funds often serve as lead plaintiffs on class actions against companies over data breaches and alleged violations of federal securities laws.
San Francisco-based Okta rejected the claims in the lawsuit, saying it promptly reported everything it knew about the cyberattack. The company faulted the plaintiffs and their attorneys for "reflexively" suing despite Okta's claims the attack had no impact on its financial wellbeing.
Judge Illston, however, rejected Okta's attempts to dismiss the lawsuit and cleared plaintiffs to move ahead with their class action on behalf of investors who held Okta stock in 2022.
The two sides presented Illston with their $60 million settlement deal to end the litigation in May.
The judge granted preliminary approval shortly after, and now the plaintiffs are seeking final approval to allow the lawyers and eligible investor plaintiffs to get paid.
Plaintiffs are represented in the action by attorneys Michael P. Canty, James T. Christie and Nicholas Manningham, of Labaton Keller Sucharow; and James M. Wagstaffe, of the Adamski Moroski firm.
Okta has been represented by Brian Lutz, of Gibson, Dunn & Crutcher.