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Monster Worldwide Inc. has agreed to pay $47.5 million to settle a class action alleging that the company backdated stock options. As part of that settlement, Andrew McKelvey, Monster’s founder and former chief executive officer, agreed to pay $550,000. In re Monster Worldwide Inc. Securities Litigation, No. 07-2237 (S.D.N.Y.). The settlement is among the largest involving stock options backdating. Earlier this month, UnitedHealth Group Inc. paid $895 million to settle a backdating class action. In June, Brocade Communications settled a backdating class action for $160 million. The recent case claimed that Monster, the parent company of online job search site Monster.com, and two of its executives, backdated stock options in order to attract and retain employees, and then failed to report that compensation to the U.S. Securities and Exchange Commission. Christopher Keller, a partner at Labaton Sucharow, lead plaintiff’s counsel, said the facts in the case were strong. “The damages of recovery were multiples of what the defendants claimed damages were,” he said, estimating that the settlement amounted to one third of what was being sought. The settlement must be approved by U.S. District Judge Jed Rakoff, who is overseeing the case. Earlier this month, the judge issued a stern opinion rejecting a proposed class representative, the Steamship Trade Association International Longshoremen’s Pension Fund (STA-ILA), in the case. In his opinion, the judge said the plaintiff had “no interest in, genuine knowledge of, and/or meaningful involvement in this case and is simply the willing pawn of counsel.” He said he would not “be a party to a sham” and that proposing such a class representative indicated that the lawyers at Labaton Sucharow “may not have fulfilled their professional responsibilities in proposing STA-ILA as a class representative.” The judge, however, approved the other class representative, Middlesex County Retirement System. Keller said the judge’s opinion, which he referred to as “a bit harsh,” had no effect on the decision to settle the case. “This pension fund was advised, considered and approved of its involvement in the case,” he said, referring to the STA-ILA. Andrew Levander, a partner at Dechert representing Monster, did not return a call for comment. Andrew DeVore, a partner at New York-based DeVore & DeMarco, who represents McKelvey, declined to comment. Labaton Sucharow has obtained other significant backdating settlements, such as a $117.5 million deal with Mercury Interactive Corp. and a $14 million agreement with American Tower Corp.

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