Archives: Options Backdating

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Headline News: Settlements, Lawsuits, Dismissals

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 article discussing the settlement can be found here.   Not only is this settlement the largest … Continue Reading

A Duo of Interesting Options Backdating Settlements

Cablevision: On June 4, 2008, Cablevision Systems announced (here) that it had entered a stipulation to settle the options-backdating litigation pending against the company, as nominal defendant, certain of its directors and officers, and other defendants. Although the Cablevision settlement is only the latest in a growing list of options backdating-related lawsuit resolutions (as is … Continue Reading

Are Options Backdating Lawsuits Settling Low?

In a very interesting May 15, 2008 paper entitled “Do Options Backdating Cases Settle for Less?” (here), NERA Economic Consulting takes a look at the options backdating-related securities class action lawsuits settlements to date, and concludes that “in the cases that have settled to date, the amounts paid to plaintiffs have been substantially lower than … Continue Reading

Uh-Oh! Serious Options Backdating Settlement Problems

As reflected in my running tally of options backdating lawsuit settlements (which can be accessed here), a number of the options backdating-related derivative lawsuits have settled for some combination of an agreement to pay the plaintiffs’ attorneys’ fees, some adjustment to the company officials’ options grants, and the company’s adoption of corporate governance reforms. But … Continue Reading

Two Options Backdating Securities Lawsuits Dismissed

In two recent federal district court decisions, two options backdating-related securities class action lawsuits – one involving Witness Systems and one involving Jabil Circuit – were dismissed. First, in the Witness Systems case, on March 31, 2008, Judge Clarence Cooper of the United States District Court for the Northern District of Georgia granted the defendants’ … Continue Reading

Don’t Forget About Options Backdating

Amidst all the subprime hoopla, it would be easy to forget that only a year ago, options backdating was the hot topic. Options backdating might now seem passé, but several considerations suggest that options backdating remains important and that we still have a long way to go before we can be sure we have seen … Continue Reading

$65 Million KLA-Tencor Options Backdating Class Action Settlement

In its January 24, 2008 quarterly earnings release (here), KLA-Tencor also announced that it had entered into an agreement to settle the options backdating-related securities class action lawsuit that had been pending against the company and certain of its directors and officers for $65 million. KLA-Tencor was among the companies mentioned in a front-page May … Continue Reading

Tyson Foods “Springloading” Derivative Lawsuit Settles

A shareholders’ derivative lawsuit that generated the most prominent judicial pronouncements about options "springloading" has been settled. According to the company’s January 18, 2008 press release (here) and its filing on Form 8-K of the same date (here), the parties have settled the consolidated shareholders’ derivative lawsuit that has been been pending since 2005 against … Continue Reading

UnitedHealth Derivative Settlement “Largest Ever”

On December 6, 2007, UnitedHealth Group announced (here) that its Special Litigation Committee had concluded its review of claims relating to the company’s option backdating practices that had been brought against certain of the company’s directors and officers. The company also announced that its former CEO William McGuire had agreed surrender certain rights and interests … Continue Reading

Options Backdating Developments

As the options backdating cases flooded in a year ago, the standard explanation of the plaintiffs’ lawyers preference for shareholders derivative lawsuits over securities class action lawsuits was that stock price declines rarely accompanied companies’ options backdating disclosures. (A list showing the predominance of derivative lawsuits among options backdating cases can be found here.) Any … Continue Reading

Another Dismissal Denied in Backdating Class Action

On November 6, 2007, the court in the Brooks Automation options backdating-related securities class action lawsuit substantially denied the defendants’ motions to dismiss. A copy of the opinion of Judge Rya Zobel of the District Court of Massachusetts can be found here. The Brooks Automation decisions joins the recent Openwave Systems decision (refer here), as … Continue Reading

The List: Options Backdating Settlements, Dismissals and Denials

As various options backdating lawsuit settlements and dismissals have accumulated in recent days, I have received a variety of inquiries from readers about comparisons with prior dispositions or about the outcomes of various other specific cases. The absence of a single, all-inclusive resource to address these questions led me to put together a compiled list … Continue Reading

More (and More) Options Backdating Dismissals

For those keeping track, the options backdating-related securities class action lawsuit filed against Hansen Natural can be added to the list of options backdating-related securities class action dismissals. (Refer here regarding prior dismissals.) Hansen announced in its 8-K dated October 23, 3007 (here) that the court granted the defendants’ motion to dismiss the plaintiff’s complaint, … Continue Reading

Special Litigation Committee Terminates Options Backdating Derivative Action

On August 24, 2007, Rambus announced (here) that a Special Litigation Committee (SLC) of its board of directors had completed its review of “claims related to stock options practices that are asserted in derivative actions against a number of present and former directors and officers of the Company.” Rambus had previously announced (here) on October … Continue Reading

Delaware Chancery Court Reexamines, Allows Springloading Claim to Proceed

In an August 15, 2007 opinion (here), Delaware Chancery Court Chancellor William B. Chandler III reexamined his February 6, 2007 refusal to dismiss plaintiffs’ claim involving stock option springloading against directors and officers of Tyson Foods, Inc. In his earlier opinion (here), Chandler had held, in response to the defendants’ motion to dismiss, that the … Continue Reading

Options Backdating: Sue the Auditors

In prior posts (most recently here), I described various attempts to shift the blame for alleged option grant manipulations to company gatekeepers. In the latest development, Vitesse Semiconductor announced on June 13, 2007 (here) that it has sued KPMG, its former auditing firm, seeking $100 million in damages and alleging that the firm failed to … Continue Reading

A Closer Look at the Mercury Interactive SEC Settlement

The SEC’s settlements of options backdating civil enforcement actions against Brocade Communications and Mercury Interactive received extensive coverage in the financial press last week (refer here and here). But there are several features of these settlements and the underlying civil actions that merit closer attention, particularly with respect to the Mercury Interactive action and settlement. … Continue Reading

Backdating Case Last Rites Prove Premature

In an earlier post (here), I reported on the voluntary dismissal of the options backdating related derivative lawsuit that had been filed against Novellus Systems (as nominal defendant) and certain of its directors and offices. The May 7, 2007 press release (here) issued by Novellus’ defense firm, Morrison Foerster, referring to the voluntary dismissal, announced … Continue Reading

More Options Backdating Lawsuit Dismissals and Settlements

In prior posts, I have tracked options backdating lawsuit dismissals (refer here) and settlements (refer here). Over the last few days, a number of additional backdating-related lawsuit dismissals and a settlement have surfaced. Here are the dismissals: Computer Sciences Corp.: On March 26, 2007, the United States District Court for the Central District of California … Continue Reading