Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.
LaCroix, who keeps track of backdating suits on his blog, said that about 160 companies have been sued. He estimated that about 20 have settled – some with cash being paid to the company and some without – and another 25 to 30 have been dismissed.
“There’s the vast bulk of cases to be resolved,” he said.
In the Zoran ruling, Alsup wrote that after the preliminary settlement was submitted, the plaintiffs’ lawyer “wrote that she would be willing to split her fee with the corporation so that there would be cash going to the corporation.” But the judge said his order would only consider the original proposal.
In the CNET case, Alsup told lawyers in a two-page order that it was too early to consider a settlement, writing that he couldn’t evaluate one without knowing what claims were viable.
Schiffrin, Barroway’s Zagar said he’s not exactly sure how the CNET order is to be interpreted, but he bristled at the possibility that parties wouldn’t be allowed to settle early on across the board. “There are often good reasons why the plaintiffs and defendants would want to do that,” he said.
Although it’s not clear whether other judges handling backdating cases will follow Alsup’s lead, lawyers working on other cases should take stock of the judge’s orders.
“Any lawyer that’s involved in negotiating a settlement to an options backdating case should read this,” LaCroix said.
