The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: Options Backdating

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Guest Post: Options Backdating Securities Class Actions: Tallying Up the Score

Posted in Options Backdating
For a period beginning in 2006, plaintiffs’ lawyers filed a wave of options backdating securities class action lawsuits. Almost all of these cases have now been resolved, although one case continues to grind through the appellate courts. Now that the cases are largely resolved, it may be time to calculate the final tally. In the … Continue Reading

D&O Insurance: Coverage for SafeNet Options Backdating Securities Suit Settlement Denied

Posted in D & O Insurance, Options Backdating
The options backdating scandal may now be ancient history, but questions surrounding insurance coverage for the scandal’s consequences apparently continue to live on. In a September 9, 2011 opinion applying Maryland law, Southern District of New York Judge Naomi Reice Buchwald ruled in a coverage action brought by SafeNet’s excess D&O insurer that, among many … Continue Reading

Maxim Integrated Products Enters Massive Options Backdating Settlement

Posted in Options Backdating
Although some noteworthy settlements from the subprime-related securities class action litigation wave have started to accumulate (refer for example here), there are still some impressive settlements coming in from the prior scandal.   In the third largest options backdating-related securities class action lawsuit settlement, Maxim Integrated Products has agreed to settle the claims against all … Continue Reading

NERA Releases Annual Canadian Securities Class Action Study

Posted in Options Backdating, Securities Litigation
On January 27, 2010, NERA Economic Consulting released its updated annual review of Canadian securities class litigation entitled "Trends in Canadian Securities Class Actions: 2009 Update" (here). The report presents an interesting study of the evolution of class action litigation in a jurisdiction outside the U.S.   According to the report, there were eight new … Continue Reading

Legislative Reform for the Securities Laws Before the 2010 Elections?

Posted in Opt-Outs, Options Backdating, Securities Litigation
Over the years, legislative reforms of the U.S. securities laws have cycled back and forth, between initiatives, on the one hand, to discourage abusive litigation and, on the other hand, to restrain corporate misconduct. In the current Wall Street bailout, post-Madoff environment, sentiment may be running high for legislative reforms that could expand liabilities under … Continue Reading

Broadcom Settles Options Backdating Securities Class Action Suit

Posted in Options Backdating, Securities Litigation
Broadcom Corporation, which previously settled its options backdating related derivative suit for $118 million, announced on December 29, 2009 (here) that it had settled the separate options backdating related securities class action lawsuit pending against the company and certain of its directors and officers in exchange for its agreement to pay $160.5 million. The settlement … Continue Reading

Comverse Technology Settles Options Backdating Derivative Suit

Posted in Options Backdating
In a December 28, 2009 press release (here), the plaintiffs’ lawyers announced the settlement of the Comverse Technology options backdating-related derivative lawsuit. This derivative lawsuit settlement is separate from, but related to, the previously announced $225 million settlement of the Comverse Technology options backdating-related securities class action lawsuit (about which refer here).The bulk of the … Continue Reading

Comverse Technology Options Backdating Securities Suit Settles for $225 Million

Posted in Options Backdating
According to a December 17, 2009 press release from the lead plaintiff’s attorneys, the parties to the Comverse Technology options backdating related securities lawsuit have agreed to settle the case for $225 million dollars. A particularly noteworthy feature is that the settlement amount includes a $60 million individual contribution from the company’s former CEO, Kobi … Continue Reading

“Mr. Ruehle, You Are a Free Man”: Judge Carney’s Dramatic Dismissal of the Broadcom Backdating Criminal Case

Posted in Options Backdating
There has been widespread news coverage of the dramatic December 15, 2009 decision of Central District of California Judge Cormac Carney to throw out the options backdating related criminal charges against Broadcom co-founder Henry T. Nicholas III and CFO William Ruehle, based on prosecutorial misconduct.   But even though many of press accounts have reproduced some … Continue Reading

Acquitted Options Backdating “Scapegoat” Seeks Revenge

Posted in Options Backdating
Former McAfee General Counsel Kent Roberts, accused of options backdating-related misconduct, was acquitted following a criminal jury trial and the SEC later dropped its separate enforcement action against him. But that apparently is not enough for Roberts – he wants vengeance.   On September 16, 2009, he filed a lawsuit in the Northern District of … Continue Reading

D&O Insurers Fund $118 Million Partial Settlement of Broadcom Options Backdating Derivative Suit

Posted in Options Backdating
In what is one of the largest ever shareholders’ derivative lawsuit settlements, the parties to the consolidated federal options backdating related derivative lawsuit involving Broadcom Corp. have agreed to settle the case for $118 million, to be funded entirely by the company’s D&O insurance carriers. The settlement does not include the company’s co-founders, Henry Samuels … Continue Reading

What, Options Backdating? Again?

Posted in Options Backdating
I found myself talking about options backdating for the first time in months yesterday, and it wasn’t just because of the Ninth Circuit’s blockbuster August 18, 2009 opinion (here) reversing and remanding for retrial the conviction of former Brocade CEO Gregory Reyes – although that certainly is a highly noteworthy development.   What triggered much … Continue Reading

KPMG Settles Options Backdating Gatekeeper Claim for $22.5 Million

Posted in Accountant Liability, Options Backdating
In the latest twist in the long-running options backdating saga, and in what appears to be a significant milestone in the options backdating-related gatekeeper claims, on June 15, 2009, Vitesse Semiconductor announced (here) that it had reached a settlement with its former auditor, KPMG LLP, in connection with the option backdating related allegations. In the … Continue Reading

Got Those Options Backdating Lawsuit Settlement Blues Again, Mama

Posted in Options Backdating
In a prior post (here), I discussed Judge William Alsup’s rejection of the proposed settlement of the options backdating-related derivative lawsuit involving Zoran Corporation, in which the parties had proposed to resolve the case without any cash payment to the company. A more recent case presents another example of a court’s similar unwillingness to approve … Continue Reading

Impac Mortgage Subprime Mortgage Securities Lawsuit Dismissed With Prejudice

Posted in Options Backdating, Subprime Litigation
On March 9, 2009, in a short but strongly worded opinion, Judge Andrew Guilford of the Central District of California dismissed with prejudice the third amended complaint in the subprime-related securities class action lawsuit filed against Impac Mortgage Holdings. A copy of the opinion can be found here.   Background As discussed here, on October … Continue Reading

Lawsuits Against Mortgage Securities Issuers: Damages Issues Ahead?

Posted in Options Backdating, Subprime Litigation
Among the many lawsuits that have flooded in as part of the subprime and credit crisis litigation wave has been a profusion of lawsuits against the mortgage-backed securities issuers and their securities offering underwriters. These lawsuits, typically filed under the ’33 Act and alleging misrepresentations in the offering documents, claim that investors who purchased securities … Continue Reading

Outside Director Liability: SEC Enforcement Action

Posted in Options Backdating, Outside Director Liability
From the earliest days of the options backdating scandal, one of the recurring questions has been the potential extent of outside director liability exposure (refer, for example, here). On September 17, 2008, In a development that may also have significant implications for more recent events, the SEC filed settled options backdating-related charges against three former … Continue Reading

Options Backdating Settlement News: Apple and UnitedHealth

Posted in Options Backdating
According to news reports (here), on September 8, 2008, Judge Jeremy Fogel of the Northern District of California preliminarily approved the settlement of the Apple options backdating derivative litigation.   As reflected in the parties’ Stipulation of Agreement of Settlement (here), the plaintiffs in the consolidated Apple derivative action agreed to dismiss the action subject … Continue Reading

Options Backdating Litigation: The Hits Just Keep on Coming

Posted in Options Backdating
Even though the current subprime litigation wave seemingly has swept the prior scandal into the past, lawsuits based on options backdating allegtions stubbornly continue to come in. Within recent days, plaintiffs’ lawyers have filed two new options backdating-related derivative lawsuits. The options backdating scandal may now be well over two years along, but it continues … Continue Reading

Blast from the Past: A New Options Backdating Lawsuit

Posted in Options Backdating
Subprime-related litigation may be all the rage, but the latest securities class action lawsuit harkens back to the era of the prior scandal-driven event. On July 8, 2008, plaintiffs’ attorneys filed an options backdating-related securities class action lawsuit against MRV Communications and certain of its directors and officers.   A copy of the plaintiffs’ attorneys’ … Continue Reading

Headline News: Settlements, Lawsuits, Dismissals

Posted in ERISA, Options Backdating, Securities Litigation
About the UnitedHealth Group Class Action Settlement: UnitedHealth Group announced on July 2, 2008 (here) that it reached an agreement to settle its high profile options backdating-related securities class action lawsuit for $895 million. A July 3, 2008 Law.com article discussing the settlement can be found here.   Not only is this settlement the largest … Continue Reading