Marvell settles backdating suit for $72 million
Marvell Technology on Tuesday agreed in principle to settle a stock-options backdating suit with shareholders for US$72 million.
The class-action lawsuit was filed by shareholders in August 2007 against Marvell and some former and current executives relating to the company's stock-option grant practices.
The settlement is subject to approval by the U.S. District Court for the Northern District of California. The final approval, and an earlier agreement to settle a shareholder derivative lawsuit, will end shareholder litigation involving Marvell related to its past stock backdating practices, the company said in a statement.
The settlement follows other problems that Marvell has faced due to its stock backdating practices.
In a May 28 filing with the U.S. Securities and Exchange Commission, Marvell said it had to restate historical financial statements to record additional noncash charges for stock-based compensation expenses related to historical option grants.
The company recorded a noncash charge of $327 million to correct accounting errors related to stock-based compensation from fiscal year 2000 through 2006, according to the filing.
In 2006, company employees, including Marvell's current CEO, Sehat Sutardja, were found to have participated in instances of backdating. They agreed to repay the company for any profits made from such actions.
The company on Tuesday also restated its earnings for the first quarter of fiscal 2010 to reflect the impact of litigation fees and other expenses. Marvell recorded a net loss of $111.5 million for the quarter ended May 2, or $0.18 per share, a decrease of $0.12 per share from what was previously reported.
IDG News Service
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