Brocade backdating scandal
Although backdating had not yet been recognized as a problem, the provisions of Sarbanes-Oxley requiring that insiders report the acquisition of securities, including options, within two days of receipt greatly hindered the ability of corporations to backdate options.
Under previous regulations, corporations could wait 45 days or, in some cases, over a year to report options, thus providing ample time for backdating.
Law360, New York (June 3, 2008, AM EDT) -- Data management company Brocade Communications Systems Inc.If the price has risen in that time you can buy the share at the option price, sell it and pocket the profit.If the price has fallen, you simply don't buy the share.has agreed to pay shareholders 0 million in what is to date the largest settlement of a class action stemming from the far-reaching options backdating scandal.
The company announced the in-principle deal with lead plaintiffs in a statement Monday, but the settlement remains subject to final approval by the U. District Court for the Northern District of California.
It’s also the second trial with a Brocade employee as the defendant.