In re Mercury Interactive Corp., Securities Litigation
Published: Dec. 1, 2007 | Filing Date: Jan. 1, 1900 |Case number: 5:05-CV-3395 (JF) Settlement – $117,500,000
Court
USDC Northern
Attorneys
Plaintiff
Defendant
Norman J. Blears
(Sidley Austin LLP)
John D. Cline
(Law Office of John D. Cline)
James N. Kramer
(Orrick, Herrington & Sutcliffe LLP)
M. Todd Scott
(Orrick, Herrington & Sutcliffe LLP)
C. Brandon Wisoff
(Farella, Braun & Martel)
Joshua D.N. Hess
(Dechert LLP)
Facts
Mountain-View based defendant Mercury Interactive Corp., owned and purchased by Palo-Alto based Hewlett-Packard in November 2006, is a software testing company used to maintain computer networks. Plaintiffs are several pension funds that owned Mercury Interactive shares. Mercury executives allegedly changed the dates of when options were granted to employees resulting in undisclosed compensation. Mercury allegedly failed to record more than $258 million in compensation expenses from 1997 to 2005 as well as misleading shareholders in its compensation disclosures.
Stock prices dropped after the company revealed the results of its investigation into the options dating issues and several top executives resigned.
Plaintiffs brought a shareholder suit against defendant which Judge Fogel dismissed in July saying the complaint failed to establish that Mercury's officers knew the statements were false, but gave plaintiffs leave to amend the complaint.
Result
Tentative settlement pending Judge Jeremy Fogel's approval whereby Mercury will pay shareholders $117.5 million.
Other Information
This is one of the first settlements of class action claims against companies that allegedly backdated stock option grants to employees. In May, Mercury settled with the SEC for $28 million for civil fraud charges. FILING DATE: Sept. 8, 2006.
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