Maxim Integrated Products has settled a stock option backdating class action lawsuit for $173 million. The settlement came weeks after a former CFO of Maxim lost a securities fraud trial. The cash payment that the Sunnyvale, California, semiconductor company has agreed to pay makes this the largest backdating settlement within the U.S. Court of Appeals for the Ninth Circuit and the third-largest overall. The settlement means Maxim is “closing the door” on stock option backdating litigation against it, according to the company.
The Plaintiffs, which were public pension funds, claimed damages during the proposed class period, between 2003 and 2008. It was alleged that Maxim had improperly backdated its stock options, which inflated its stock price. Last July, the trial judge granted much of Maxim’s motion to dismiss the complaint, limiting which company statements the Plaintiffs could argue had caused them to lose money. In December, the Plaintiffs moved to certify the class, and that motion was pending when the settlement was reached.
Gregory Keller, a lawyer with Chitwood Harley Harnes, and Blair Nicholas, a lawyer with Bernstein Litowitz Berger & Grossmann, were co-lead counsel for the Plaintiffs. This appears to be an excellent recovery for shareholders. It also is an indication of the significant impact that institutional investors can have when they take the lead in securities class actions.
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